This book is about things that never change.
It has some great ideas. But my main gripe with it is that it doesn’t draw out the key themes common to the 23 different ideas discussed.
So, before sharing my key takeaways from each chapter, I’ll summarize the key themes I see.
Also, Morgan Housel’s first book, The Psychology of Money was very, very good. You can read my takeaways from the Psychology of Money here.
The 3 Key Themes In Same As Ever
Using powerful stories, Housel’s book describes the fundamental properties of three things:
- The Future: The future is uncertain, volatile and surprising.
It’s generally bad in the short-term and great in the long-term (though in the really long term we are all dead). Most future gains come from surviving the short-term to benefit from compounding in the long-term. - Human Psychology: We crave certainty and are attracted to complexity. Good stories persuade us far more than facts. We are idiosyncratic, deeply irrational and biased towards ideas from our own experience. Our expectations can overwhelm our means if left unchecked.
Our tendency to innovate in hard times and become complacent in good times causes consistent cycles of elation and despair. - The Nature of Reality: Compounding over time is magic.
Most organisms, businesses, entities do not scale easily—grow too fast and they break. Competitive advantages do not last.
My Key Takeaways By Chapter
Chapter Names are in Bold. For all writing not in quotes, assume this: if it’s good it’s from Housel, if it’s bad it’s from me.
- Introduction: If there were 1000 parallel universes, what would be true in every single one
Naval Ravikant: “I want to live in a way that if my life played out 1000 times, naval is successful 999 times.” - Hanging By A Thread: The future is volatile and sensitive to tiny random events that we cannot control or see coming. We have no idea where we are going.
- Risk Is What You Don’t See: The events that will turn out to be most consequential are the ones we are totally unprepared for. Thus, the biggest risk is whatever is left over after you have accounted for everything you can think of.
Nassim Taleb: “Invest in preparedness, not in prediction.” - Expectations And Reality: Everyone, everywhere, doing almost any task, is just in pursuit of some space between expectations and reality.
Wealth and happiness is a two part equation: what you have vs what you need/expect. People overemphasize having more, not realizing that they need to manage their expectations as well.
If your expectations increase just as much as your means, you’re no better off. Work to create a positive gap between expectations and reality. - Wild Minds: Unique minds have to be accepted as a full package, with their flaws, idiosyncrasies and crazy beliefs.
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.
The same personality traits that push people to the top can increase the odds of pushing them over the edge. - Wild Numbers: A common trait of human behavior is the burning desire for certainty despite living in an uncertain and probabilistic world.
News and technology connect us to billions of people and events around the world, meaning that the likelihood of us hearing about once-in-a-lifetime events routinely is very high.
But that doesn’t mean the world is as crazy at the level of a town or city.
We also hear a lot more bad news than good news, because it performs better as television.
What you want to avoid are catastrophic risks, but you shouldn’t be too sensitive to run-of-the-mill, inevitable risks.
(My addition from Antifragile: small forest fires prevent a catastrophic fire by burning up the combustible material on the ground. When you try too hard to prevent small fires, you risk causing a once-in-a-lifetime catastrophic fire.) - Best Story Wins: People don’t remember books, they remember sentences.
Harari’s highly unoriginal work Sapiens is the most successful anthropology book of all time because it’s the best story told with those facts.
Bill Bryson’s the Body: A Guide for Occupants is an anatomy textbook that became The Washington Post’s Book of the Year because of his storytelling.
Stephen Hawking on his bestselling physics books: “Someone told me that each equation I included in the book would halve the sales.”
Good stories are leverage for ideas.
And stories create opportunity. Visa Founder, Dee Hock: “New ways of looking at things create much greater innovation than new ways of doing them.” - Does Not Compute: Will Durant: “Logic is an invention of man and may be ignored by the universe.”
Jeff Bezos: “When the anecdotes and the data disagree, the anecdotes are usually right. There’s something wrong with the way you are measuring it.”
Archibald Hill: “To tell you the truth, we don’t do it because it is useful, but because it’s amusing.” This is true of most academics.
When people are involved, logic often goes out of the window. - Calm Plants the Seeds of Crazy: Hyman Minsky: stability is destabilizing. When the economy is good, people become optimistic and take on too much debt, causing a reversal.
Crazy doesn’t mean broken, it’s a normal part of the cycle.
Realizing the power of enough: The only way to know where the top is, is to continue until you go downhill.
Understand the power of 15% returns per year over 50 years. And why Seinfeld ended his show when it was still the most popular on TV. - Too much, too soon, too fast: Warren Buffet: you can’t make a baby in one month by getting nine women pregnant.
Things operate differently at different scales—a 6-foot-tall flea wouldn’t be able to jump many times it’s height.
Most great things in life gain their value from patience and scarcity.
Chasing too much growth, too fast, even for good ideas, is a recipe for disaster. - When the Magic Happens: Stress focuses your attention in a way that good times can’t.
Hardship is the most potent fuel for problem-solving.
The 1930s was one of the darkest periods in American history. Yet, it also led to productivity gains and technological progress that helped make the rest of the twentieth century so prosperous. - Overnight tragedies and long-term miracles: Good news comes from compounding, which always takes time. Bad news comes from a loss in confidence or a catastrophic error that can occur in a blink of an eye.
Good news is often about many bad things that didn’t happen, while bad news is about what any particular tragedy that did occur. - Tiny and Magnificent: Compounding gains over time are indistinguishable from magic.
Evolution, the most astonishing force in the universe, shows us the power of compounding over 3.8 billion years.
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?” - Elation and Despair: The trick in any field is to be able to survive short-run problems long enough to enjoy long-term growth.
You need a mix of paranoia (preparedness and avoidance of ruin) and optimism (investing in the long-term, believing in exceptional gains over time). - Casualties of Perfection: Inefficiencies and redundancies are important because our predictions are often wrong, and risk is what you don’t seen.
More cash is inefficient in a bull run, but as valuable as oxygen in a bear run.
Amos Tversky: “the secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.”
The more perfect you try to become, the more vulnerable you generally are. Evolution is imperfect, but works magnificently. - It’s Supposed to Be Hard: Everything worth pursuing comes with a little pain.
Lawrence of Arabia: Lawrence on his magic trick of diffusing a candle with his fingers: “the trick is not minding that it hurts.”
Charlie Munger: “The safest way to try to get what you want is to try to deserve what you want.”
The best way to grow your audience is to write better stuff worth reading, but nobody tells you that because it’s not a hack, it’s hard work.
Seinfeld on his show: “If you’re efficient, you’re doing it the wrong way. The right way is the hard way.”
Jeff Bezos: “everything comes with overhead…every job comes with pieces you don’t like. And we need to say: That’s part of it.”
Identify the price and be willing to pay it. - Keep Running: Competition never stops, so winners don’t get to consolidate their gains. Therefore, most competitive advantages eventually die. (E.g. evolution, business).
(My note: ideas conversely seem to display the Lindy Effect: the longer an piece of media has stuck around, the longer it is likely to stay. Perhaps there are multipliers for successful ideas, which are not there for successful businesses. What are the properties of situations where success breeds more success, and those where success doesn’t guarantee any future rewards?) - The Wonders of the Future: It’s easy to discount the potential of new technology. Most technologies that were eventually ubiquitous and transformative were initially developed for niche cases (often military purposes).
- Harder than it Looks and Not as Fun as It Seems: The grass is always greener on the other side.
- Incentives: The Most Powerful Force in the World: Incentives often make people do and rationalize crazy and immoral things.
Which of my views would change if my incentives were different?
(For me: If purely thinking and writing philosophically allowed me to make a good living and have time independence, I’m not sure I’d believe in the importance of publishing and building readership online as much) - Now You Get It: Chris Rock on who actually teaches kids in school: “Teachers do one half, bullies do the other.”
Nothing is more persuasive than what you’ve experienced first hand.
(For me: this is the difference between knowledge and insight. You can know something intellectually, but when you experience it—that’s a whole other level of truth). - Time Horizons: Long-term is less about time horizon and more about flexibility—not needing to cash in on your efforts at any given time.
Being “in it for the long-run” doesn’t absolve you of short-term pains—you still have to experience all the short-term pains in real-time and stay in the game.
The long-run is a collection of short-runs that you have to put up with. - Trying Too Hard: There are no points avoided for difficulty. People are attracted to complexity, sometimes this leads them to miss the most effective solution just because it’s simple.
A field that seems to have millions of components turns out to only really have a few core principles (3 – 12 according to John Reed).
Stephen King, on his short book On Writing: “…most books about writing are filled with bullshit. I figured the shorter the book, the less bullshit.”
In writing, length is an easy way to signal effort but it’s the shorter writing that’s usually more effective and generous.
Thomas McCrae, a Doctor: “…some of us are too much attracted by the thought of rare things and forget the law of averages in diagnosis”.
Is this issue complex, or are you just attracted to complexity? - Wounds Heal, Scars Last: The emotional memory of impactful events and how they change your worldview tend to last far longer than the actual impact of the event.
You’re also more likely to predict that similar events could happen again, even if their actual probability is low.
Most debates are people with different experiences talking over each other.
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I write once a month, sharing ideas from other writers and insights of my own on building an exceptional life.