Same as Ever | A Guide To What Never Changes by Morgan Housel

I. Brief Summary

Morgan Housel captures timeless lessons that are same as ever. It is a collection of stories that amplifies human behavior, patterns and psychology that never change. The timeless principles make us better in dealing with success, failure, environment and technological shifts. Focusing on what is permanent is far more rewarding than losing sleep on what is beyond our control.

II. Big Ideas

• Abig lesson from history is realizing how much of the world hangs by a thread. Some of the biggest and most consequential changes in history happened because of a random, unforeseeable, thoughtless encounter or decision that led to magic or mayhem.
• The law of life is everything will change around you but human greed and fear.
• Predicting what the world will look like 50 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 biggest risk is always what no one sees coming, because if no one sees it coming, no one’s prepared for it; and in if no one’s prepared for it, its damage will be amplified when it arrives.
  • Victor Prather, NASA pilot who successfully tested a new space suit in a low-orbit flight in 1961. As Prather descended back to earth, he opened the faceplate on his helmet when he was low enough to breathe on his own. He landed in the ocean as planned, but there was a small mishap: Prather slipped from his craft while connecting himself to the rescue helicopter’s line, falling into the ocean. The spacesuit 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. How could NASA miss something so obvious when it always has an alternative plan on anything that could go wrong?
• Your happiness depend on your expectations more than anything else. Today’s economy is good at generating 3 things: wealth, the ability to show off wealth and great envy for other people’s wealth.
• The key thing is that unique minds have to be accepted as a full package, because the things they do well and that we admire cannot be separated from the things we wouldn’t want for ourselves or we look down upon.
• A common trait of human behavior is the burning desire for certainty despite living in an uncertain and probabilistic world. Probability is about nuance and gradation. But in the real world people pay attention to black-and-white results.
• Best story wins. There is too much information in the world for everyone to calmly sift through the data, looking for the most rational, most correct answer. People are busy and emotional, and a good story is always more powerful and persuasive than ice-cold statistics. The power of stories over statistics. It’s hard to compute, but it’s how the world works.
• 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. For example, accepting that what’s rational to one person can be crazy to another.
• The irony of good times is that they breed complacency and skepticism of warnings. What calm planting the seeds of crazy does is important: It makes us fundamentally underestimate the odds of things going wrong, and the consequences of something going wrong. Things can become the most dangerous when people perceive them to be the safest. Accepting that crazy doesn’t mean broken. Crazy is normal; beyond the point of crazy is normal.
• A most convenient size is a proper state where things work well but break when you try to scale them to a different size or speed. It applies to many things in life. Most great things in life gain their value from two things:
  • Patience, to let something grow.
  • Scarcity, to admire what it grows into.
• The circumstances that tend to produce the biggest innovations are those that cause people to be worried, scared, and eager to move quickly because their future depends on it. Stress focuses your attention in ways good times can’t. It kills procrastination and indecision, taking what you need to get done and shoving it so close to your face that you have no choice but to pursue it, right now and to the best of your ability.
• Good news takes time but bad news tends to occur instantly. The most important things come from compounding. But compounding takes awhile, so it’s easy to ignore. Complex to make, simple to break.
• Most amazing things happen when something tiny and insignificant compounds into something extraordinary. The real lesson from evolution: if you have a big number in the exponent slot, you do not need extraordinary change to deliver extraordinary results. It’s not intuitive, but it’s so powerful.
• Progress requires optimism and pessimism to coexist. Planning like a pessimist and dreaming like an optimist. You can only be an optimist in the long run if you’re pessimistic enough to survive the short run. The rational optimists are those who acknowledge that history is a constant chain of problems and disappointments and setbacks, but who remain optimistic because they know setbacks don’t prevent eventual progress.
• There are no shortcuts in life. One of the most useful life skill is enduring the pain when necessary rather than assuming there’s a hack, or a shortcut, around it. Everything has a price, and the price is usually proportionate to the potential rewards. 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.
• You should never be surprised when something that dominates one era dies off in the next. Keep running. No competitive advantage is so powerful that it can let you rest your laurels.
• It’s easy to always feel like we’re falling behind. When you realize that progress is made step-by-step, slowly over time, you realize that tiny little innovations that no one thinks much of are the seeds for what has the potential to compound into something great.
• Everything is sales. Skills are advertised. Flaws are hidden. What most of us see most of the time is a fraction of what has actually happened, or what’s going on inside people’s heads.
• 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. One of the strongest pulls of incentives is the desire for people to hear inwardly what they want to hear and see only what they want to see.
• People often have no idea how they’ll respond to a big windfall or an incredible gift of good luck until they’ve experienced it firsthand. You might think you know how it’ll feel. Then you experience it firsthand and you realize, ah, okay. It’s more complicated than you thought.
• Long term is less about time horizon and more abut flexibility. The world changes, which makes changing your mind not just helpful, but crucial. But changing your mind is hard because fooling yourself into believing a falsehood is so much easier than admitting a mistake. Doing long-term thinking well requires identifying when you’re being patient vs just stubborn.
• Complexity gives a comforting impression of control, while simplicity is hard to distinguish from cluelessness.
• Wounds heal, scars last. People who’ve had different experiences than you will think differently than you do. They’ll have different goals, outlooks, wishes, and values. So most debates are not actual disagreements; they’re people with different experiences talking over each other. Disagreement has less to do with what people know and more to do with what they’ve experienced. And since experiences will always be different, disagreement will be constant.
• Questions to ask:
  • Who has the right answers but I ignore because they’re not articulate?
  • Which of my current views would I disagree with if I were born in a different country or generation?
  • What do I desperately want to be true so much that I think it’s true when it’s clearly not?
  • What is a problem that I think applies only to other countries/industries/careers that will eventually hit me?
  • What do I think is true but is actually just good marketing?
  • What haven’t I experienced firsthand that leaves me naive about how something works?
  • What looks unsustainable but is actually a new trend we haven’t accepted yet?
  • Who do I think is smart but is actually full of it?
  • Am I prepared to handle risks I can’t even envision? Which of my current views would change if my incentives were different?
  • What are we ignoring today that will seem shockingly obvious in the future?
  • What events very nearly happened that would have fundamentally changed the world I know if they had occurred?
  • How much have things outside my control contributed to things I take credit for?
  • How do I know if I’m being patient (a skill) or stubborn (a flaw)?
  • Who do I look up to that is secretly miserable?
  • What hassle am I trying to eliminate that’s actually an unavoidable cost of success?
  • What crazy genius that I aspire to emulate is actually just crazy?
  • What strong belief do I hold that’s most likely to change?
  • What’s always been true?
  • What’s the same as ever?

III. Quotes

• This is a short book because most books about writing are filled with bullshit. I figured the shorter the book, the less bullshit.
• New ways of looking at things create much greater innovation than new ways of doing them. — Dee Hock
• The first rule of happiness is low expectations.
• We might have higher incomes, more wealth, and bigger homes—but it’s all so quickly smothered by inflated expectations.
• 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.”
• It’s become so much easier in recent decades to look around and say, “I may have more than I used to. But relative to that person over there, I don’t feel like I’m doing that great.” Part of that envy is useful, because saying “I want what they have” is such a powerful motivator of progress. Yet the point stands: We might have higher incomes, more wealth, and bigger homes—but it’s all so quickly smothered by inflated expectations.
• You cannot compare a Silicon Valley engineer who is forcing you to click on ads with a Manhattan Project engineer who is working to protect the existence of our country.
• Risk is what’s left over after you think you’ve thought of everything. — Carl Richard
• Invest in preparedness, not in prediction. — Nassim Taleb
• 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. — Montesquieu
• One day, I realized with all these people I was jealous of, I couldn’t just choose little aspects of their life. I couldn’t sat I want his body, I want her money, I want his personality. You have to be that person. Do you want to actually be that person with all of their reactions, their desires, their family, their happiness level, their outlook on life, their self-image? If you’re not willing to do a wholesale, 24/7, 100% swap with who that person is, then there is no point in being jealous. — Naval Ravikant
• Everything comes with overhead. That’s reality, Everything comes with pieces that you don’t like....And we need to say: That’s part of it. — Jeff Bezos
• The more the internet exposes people to new points of view, the angrier people get that different views exist. — Benedict Evans
• Our life is indeed the same as it ever was the same physiological and psychological processes that have been man’s for hundreds of thousands of years still endure. — Carl Jung
• Complacency breeds doom.
• Perfect is the enemy of good.
• Good news is the deaths that didn’t take place, the diseases you didn’t get, the wars that never happened, the tragedies avoided, and the injustices prevented. That’s hard for people to contextualize or even imagine, let alone measure. But bad news is visible…It’s the terrorist attack, the war, the car accident, the pandemic, the stock market crash, and the political battle you can’t look away from.
• A simple rule that’s obvious but easy to ignore is that nothing worth pursuing is free. How could it be otherwise? Everything has a price, and the price is usually proportionate to the potential rewards. But there’s rarely a price tag. And you don’t pay the price with cash. 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.
• People tend to have short memories. Most of the time they can forget about bad experiences and fail to heed lessons previously learned. But hard-core stress leaves a scar. Experiencing something that makes you stare ruin in the face and question whether you’ll survive can permanently reset your expectations and change behaviors that were previously ingrained.
• Militaries are engines of innovation because they occasionally deal with problems so important—so urgent, so vital—that money and manpower are removed as obstacles, and those involved collaborate in ways that are hard to emulate during calm times.
• We spend so much effort trying to improve our income, skills, and ability to forecast the future—all good stuff worthy of our attention. But on the other side there’s an almost complete ignorance of expectations, especially managing them with as much effort as we put into changing our circumstances.
• Risk is what’s left over after you think you’ve thought of everything.” That’s the real definition of risk—what’s left over after you’ve prepared for the risks you can imagine. Risk is what you don’t see.
• Every current event—big or small—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. Viewing events in isolation, without an appreciation of their long roots, helps explain everything from why forecasting is hard to why politics is nasty.
• The best story wins. Not the best idea, or the right idea, or the most rational idea. Just whoever tells a story that catches people’s attention and gets them to nod their heads is the one who tends to be rewarded.
• When someone is viewed as more extraordinary than they are, you’re more likely to overvalue their opinion on things they have no special talent in.
• The decline of local news has all kinds of implications. One that doesn’t get much attention is that the wider the news becomes the more likely it is to be pessimistic. Two things make that so: 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.
• Van Valen called it the Red Queen hypothesis of evolution. In Alice in Wonderland, Alice meets the Red Queen in a land where you have to run just to stay in place: However fast they went, they never seemed to pass anything. “I wonder if all the things move along with us?” thought poor puzzled Alice. And the Queen seemed to guess her thoughts, for she cried, “Faster! Don’t try to talk! Keep running!” “Keep running” just to stay in place is how evolution works. And isn’t this how most things in modern life work? Business? Products? Careers? Countries?
• The irony is that growth and progress are way more powerful than setbacks. But setbacks will always get more attention because of how fast they occur.
• Real GDP per capita increased eightfold in the last hundred years.
• Good news comes from compounding, which always takes time, but bad news comes from a loss in confidence or a catastrophic error that can occur in a blink of an eye.
• 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 typical attempt to clear up an uncertain future is to gaze further and squint harder—to forecast with more precision, more data, and more intelligence. Far more effective is to do the opposite: Look backward, and be broad. Rather than attempting to figure out little ways the future might change, study the big things the past has never avoided.
• We can see and measure just about everything in the world except people’s moods, fears, hopes, grudges, goals, triggers, and expectations. That’s partly why history is such a continuous chain of baffling events, and always will be.
• An important component of human behavior is that people who’ve had different experiences than you will think differently than you do. They’ll have different goals, outlooks, wishes, and values. So most debates are not actual disagreements; they’re people with different experiences talking over each other.
• Simplicity is the hallmark of truth—we should know better, but complexity continues to have a morbid attraction. When you give an academic audience a lecture that is crystal clear from alpha to omega, your audience feels cheated....The sore truth is that complexity sells better.
• 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.
• A carefree and stress-free life sounds wonderful only until you recognize the motivation and progress it prevents. No one cheers for hardship—nor should they—but we should recognize that it’s the most potent fuel of problem-solving, serving as both the root of what we enjoy today and the seed of opportunity for what we’ll enjoy tomorrow.
• What makes life mean something is purpose. A goal. The battle, the struggle—even if you don’t win it.
• The need for certainty is the greatest disease the mind faces. — Robert Greene
• 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 knowledge catches more attention than it should, for two reasons. One, there’s a lot of it, eager to keep our short attention spans occupied. Two, we chase it down, anxious to squeeze insight out of it before it loses relevance. Permanent information is harder to notice because it’s buried in books rather than blasted in headlines. But its benefit is huge. It’s not just that permanent information never expires, letting you accumulate it. It also compounds over time, leveraging off what you’ve already learned. Expiring information tells you what happened; permanent information tells you why something happened and is likely to happen again. That “why” can translate and interact with stuff you know about other topics, which is where the compounding comes in.
• How can I endure a never-ending parade of nonsense?
• If you find the right balance between desperation and fear, you can make people do anything. – Trevor Noah
• The next generation never learns anything from the previous one until it’s brought home with a hammer.
• Psychologist Jonathan Haidt says people don’t really communicate on social media so much as they perform for one another.
• A lot of bankers screwed up during the 2008 financial crisis. But too many of us underestimate how we ourselves would have acted if someone dangled enormous rewards in our face. Most people are blind to their own faults. To paraphrase Ben Franklin: Vice knows it’s ugly, so it hides behind a mask.
• Edison understood the process of scientific discovery. Big innovations don’t come at once, but rather are built up slowly when several small innovations are combined over time. Edison wasn’t a grand planner. He was a prolific tinkerer, combining parts in ways he didn’t quite understand, confident that little discoveries along the way would be combined and leveraged into more meaningful inventions.
• A one-hundred-year event doesn’t mean it happens every one hundred years. It means there’s about a 1 percent chance of it occurring in any given year.
• I can promise you that will be the case going forward. The biggest risk and the most important news story of the next ten years will be something nobody is talking about today.
• The best financial plan is to save like a pessimist and invest like an optimist.
• Whenever a once powerful thing loses an advantage, it is tempting to ridicule the mistakes of its leaders. But it’s easy to overlook how many forces pull you away from a competitive advantage once you have one, specifically because you have one. Success has its own gravity. “The higher the monkey climbs a tree, the more you can see his ass,” oil tycoon T. Boone Pickens used to say. Five big things tend to eat away at competitive advantages. One is that being right instills confidence that you can’t be wrong, which is a devastating characteristic in a world where outlier success has a target on its back, with competitors in tow. Size is associated with success, success is associated with hubris, and hubris is the beginning of the end of success.
• Marbles don’t get better at staying in the jar.
• Harry Truman—a failed retailer, failed farmer, failed zinc miner, failed oil driller, almost universally panned when he became president after Franklin Roosevelt died.
• A little cool air from the north is no big deal. A little warm breeze from the south is pleasant. But when they mix together over Missouri you get a tornado. That’s called emergent effects, and they can be wildly powerful. Same with new technology. One boring thing plus one boring thing can equal one world-changing thing in a way that’s hard to fathom if you don’t respect exponential growth.
• “Great books are wine,” Twain said, “but my books are water. But everybody drinks water.”
• Mark Twain found the universal emotions that influence everyone, regardless of who they were or where they were from, and got them to nod their heads in the same direction. It’s nearly magic. Guiding people’s attention to a single point is one of the most powerful life skills.
• The world changes, which makes changing your mind not just helpful, but crucial. But changing your mind is hard because fooling yourself into believing a falsehood is so much easier than admitting a mistake.
• Time is compounding’s magic, and its importance can’t be minimized. But the odds of success fall deepest in your favor when you mix a long time horizon with a flexible end date—or an indefinite horizon.
• The first nuclear bomb was developed to end World War II. Within a decade we had enough bombs to end the world—all of it.
• Franklin Roosevelt - the most powerful man in the world, whose paralysis meant his aides often had to carry him to the bathroom - once said, "If you can't use your legs and they bring you milk when you wanted orange juice, you learn to say 'that's all right,' and drink it."
• Ho Chi Minh once put it more bluntly: “You will kill ten of us, and we will kill one of you, but it is you who will tire first.” Same in investing. Cash is an inefficient drag during bull markets and as valuable as oxygen during bear markets.
• I’m confident in other people’s overconfidence, so I know there will be mistakes and accidents and booms and busts along the way.
• Just like evolution, the key is realizing that the more perfect you try to become, the more vulnerable you generally are.
• Every investment price, every market valuation, is just a number from today multiplied by a story about tomorrow.
• 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.
• People don’t remember books; they remember sentences.
• Seinfeld asked if McKinsey is funny. No, the magazine said. “Then I don’t need them,” he said. “If you’re efficient, you’re doing it the wrong way. The right way is the hard way. The show was successful because I micromanaged it—every word, every line, every take, every edit, every casting.” If you’re efficient, you’re doing it the wrong way. That is so counterintuitive. But I think it perfectly highlights the danger of shortcuts.”
• Philosophers have spent centuries discussing the idea that there are an infinite number of ways your life could play out, and you just happen to be living in this specific version. It’s a wild thing to contemplate, and it leads to the question: What would be true in every imaginable version of your life, not just this one?
• Albert Einstein put it this way: I take time to go for long walks on the beach so that I can listen to what is going on inside my head. If my work isn’t going well, I lie down in the middle of a workday and gaze at the ceiling while I listen and visualize what goes on in my imagination. Mozart felt the same way: When I am traveling in a carriage or walking after a good meal or during the night when I cannot sleep—it is on such occasions that my ideas flow best and most abundantly.
• The brain of man is programmed with a tendency to quickly remove doubt by reaching some decision. It is easy to see how evolution would make animals, over the eons, drift toward such quick elimination of doubt. After all, the one thing that is surely counterproductive for a prey animal that is threatened by a predator is to take a long time in deciding what to do.
• The world is driven by forces that cannot be measured.
• The core here is that people think they want an accurate view of the future, but what they really crave is certainty.
• Biologist Leslie Orgel used to say, “Evolution is cleverer than you are,” because whenever a critic says, “Evolution could never do that,” they usually just lacked imagination. It’s also easy to underestimate because of basic math. Evolution’s superpower is not just selecting favorable traits. That part is so tedious, and if it’s all you focus on you’ll be skeptical and confused. Most species’ change in any millennia is so trivial it’s unnoticeable. The real magic of evolution is that it’s been selecting traits for 3.8 billion years. The time, not the little changes, is what moves the needle.”
• What kind of person makes their way to the top of a successful company, or a big country? Someone who is determined, optimistic, doesn’t take no for an answer, and is relentlessly confident in their own abilities. What kind of person is likely to go overboard, bite off more than they can chew, and discount risks that are blindingly obvious to others? Someone who is determined, optimistic, doesn’t take no for an answer, and is relentlessly confident in their own abilities.
• The generation who lived through the Great Depression never viewed money the same afterward. They saved more money, took on less debt, and were wary of risk—for the rest of their lives.
• Here you have one of the top cancer researchers in the world, and he’s saying he could make a bigger impact on cancer if he focused on getting people to quit smoking—but that’s not intellectually stimulating enough for him. Or for many scientists, for that matter. Now, I don’t blame him—and Weinberg has added enormous value to the war on cancer. But here we have an example of complexity being favored for its excitement, when simplicity may actually do a better job. And that, I’ll tell you, is a big lesson that applies to many things.
• A mind that is stretched by new experience can never go back to its old dimensions. — Oliver Wendell Holmes
• 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.