Same as Ever:

A Guide to What Never Changes

by Morgan Housel

After finishing this book in November of 2023, I wrote,

 

"Keeping in mind the things we can count on helps with sanity, planning, and effectiveness."

 

My clippings below collapse a 240-page book into nine pages, measured by using 12-point type in Google Docs.

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See all my book recommendations.  

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Here are the selections I made:

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Amazon founder Jeff Bezos once said that he’s often asked what’s going to change in the next ten years. “I almost never get the question: ‘What’s not going to change in the next ten years?’ ” he said. “And I submit to you that that second question is actually the more important of the two.”

 

A big 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.

 

All the British had to do was sail up the East River and Washington’s cornered troops would have been wiped out. But it never happened, because the wind wasn’t blowing in the right direction and sailing up the river became impossible. 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.

 

Zangara fired five shots. One of them hit Chicago mayor Anton Cermak, who was shaking hands with Zangara’s intended target. Cermak died. The target, Franklin Delano Roosevelt, was sworn in as president two weeks later. Within months of his inauguration Roosevelt transformed the U.S. economy through the New Deal. John Nance Garner—who would have become president had Zangara hit his target—opposed most of the New Deal’s deficit spending. He almost certainly wouldn’t have enacted many of the same policies, some of which still shape today’s economy.

 

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

 

The biggest risk is always what no one sees coming, because if no one sees it coming, no one’s prepared for it; and if no one’s prepared for it, its damage will be amplified when it arrives.

 

As financial advisor Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything.”

 

Put another way: There is rarely more or less economic uncertainty; just changes in how ignorant people are to potential risks. Asking what the biggest risks are is like asking what you expect to be surprised about.

 

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.

 

Psychologist Daniel Kahneman says, “The idea that what you don’t see might refute everything you believe just doesn’t occur to us.”

 

Nassim Taleb says, “Invest in preparedness, not in prediction.” That gets to the heart of it.

 

The first rule of happiness is low expectations.

 

Montesquieu wrote 275 years ago, “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.”

 

John D. Rockefeller never had penicillin, sunscreen, or Advil. But you can’t say a low-income American with Advil and sunscreen today 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 remarkably short period of time when the people around you become better off. Investor Charlie Munger once noted that the world isn’t driven by greed; it’s driven by envy.

 

At the time, Kremen was forty-three years old and worth $10 million. That put him in the top half of 1 percent of people in the country, and probably the top one thousandth of 1 percent of people in the world. In Silicon Valley, however, it made him just another guy. “You’re nobody here at $10 million,” he said. The Times wrote: “He logs 60- to 80-hour workweeks because he does not think he has nearly enough money to ease up.”

 

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.

 

It also highlights just how important managing expectations can be if you want to live a happy life.

 

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.

 

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 goes like this: You think you want progress, both for yourself and for the world. But most of the time that’s not actually what you want. You want to feel a gap between what you expected and what actually happened. And the expectation side of that equation is not only important, but it’s often more in your control than managing your circumstances.

 

People who think about the world in unique ways you like also think about the world in unique ways you won’t like.

 

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.

 

People don’t want accuracy. They want certainty.

 

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

 

The core here is that people think they want an accurate view of the future, but what they really crave is certainty.

 

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.

 

People don’t want accuracy. They want certainty.

 

Professor Philip Tetlock has spent most of his career studying experts, self-proclaimed or otherwise. A big takeaway from his research is how awful so many experts are at predicting politics and the economy. Given that track record, will people ever choose to ignore the experts? “No way,” Tetlock once said. “We need to believe we live in a predictable, controllable world, so we turn to authoritative-sounding people who promise to satisfy that need.”

 

Stories are always more powerful than statistics.

 

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.

 

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

 

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?

 

The world is driven by forces that cannot be measured.

 

Author Robert Greene once wrote, “The need for certainty is the greatest disease the mind faces.”

 

Calm Plants the Seeds of Crazy

 

Crazy doesn’t mean broken. Crazy is normal; beyond the point of crazy is normal.

 

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.

 

The irony is that when markets are guaranteed not to crash—or more realistically, when people think that’s the case—they are far more likely to crash.

 

Modern life in general is about as safe as it’s ever been. And effectively all the improvement over the last century has come from a decline in infectious disease. In 1900 roughly eight hundred per one hundred thousand Americans died each year from infectious disease. By 2014 that was forty-six per one hundred thousand—a 94 percent decline. This decline is probably the best thing ever to happen to humanity.

 

Too Much, Too Soon, Too Fast

 

A good idea on steroids quickly becomes a terrible idea.

 

Nassim Taleb says he’s a libertarian at the federal level, a Republican at the state level, a Democrat at the local level, and a socialist at the family level. People handle risk and responsibility in totally different ways when a group scales from 4 people to 100 to 100,000 to 100 million.

 

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.”

 

When the Magic Happens

 

Stress focuses your attention in ways that good times can’t.

 

“The excess energy released from overreaction to setbacks is what innovates!” wrote Nassim Taleb.

 

Overnight Tragedies and Long-Term Miracles

 

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.

 

Real GDP per capita increased eightfold in the last hundred years.

 

America of the 1920s had the same real per-capita GDP as Turkmenistan does today.

 

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.

 

Big risks are easy to overlook because they’re just a chain reaction of small events, each of which is easy to shrug off. So people always underestimate the odds of big risks.

 

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?”

 

Elation and Despair

 

Progress requires optimism and pessimism to coexist.

 

The best financial plan is to save like a pessimist and invest like an optimist.

 

Stockdale was then asked who had the hardest time in prison. He said that was easy: “It was the optimists.” The prisoners who constantly said, “We’re going to be home by Christmas” were the ones whose spirits were shattered when another Christmas came and went. “They died of a broken heart,” Stockdale said.

 

Paul Allen once wrote about the first time he met Bill: You could tell three things about Bill Gates pretty quickly. He was really smart. He was really competitive; he wanted to show you how smart he was. And he was really, really persistent. But there was another side to Bill Gates. It was almost paranoia, virtually the opposite of his unshakable confidence. From the day he started Microsoft, he insisted on always having enough cash in the bank to keep the company alive for twelve months with no revenue coming in. In 1995 he was asked by Charlie Rose why he kept so much cash on hand. Things change so fast in technology that next year’s business wasn’t guaranteed, he said. “Including Microsoft’s.” In 2007 he reflected: I was always worried because people who worked for me were older than me and had kids, and I always thought, “What if we don’t get paid, will I be able to meet the payroll?” Here again, optimism and confidence mixed with heavy pessimism. What Gates seems to get is that you can only be an optimist in the long run if you’re pessimistic enough to survive the short run.

 

Save like a pessimist and invest like an optimist. Plan like a pessimist and dream like an optimist.

 

Casualties of Perfection

 

There is a huge advantage to being a little imperfect.

 

Many people strive for efficient lives, where no hour is wasted. But an overlooked skill that doesn’t get enough attention is the idea that wasting time can be a great thing.

 

Psychologist Amos Tversky once said that “the secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.”

 

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.

 

Nassim Taleb says, “My only measure of success is how much time you have to kill.” More than a measure of success, I think it’s a key ingredient. 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.

 

It’s Supposed to Be Hard

 

Everything worth pursuing comes with a little pain. The trick is not minding that it hurts.

 

Keep Running

 

Most competitive advantages eventually die.

 

The Wonders of the Future

 

It always feels like we’re falling behind, and it’s easy to discount the potential of new technology.

 

On January 12, 1908—the same day the Post ran their column with Edison—the first long-distance wireless message was sent in France.

 

Harder Than It Looks and Not as Fun as It Seems

 

“The grass is always greener on the side that’s fertilized with bullshit.”

 

It’s easiest to convince people that you’re special if they don’t know you well enough to see all the ways you’re not.

 

Everyone’s dealing with problems they don’t advertise, at least until you get to know them well. Keep that in mind and you become more forgiving—of yourself and others.

 

Incentives: The Most Powerful Force in the World

 

When the incentives are crazy, the behavior is crazy. People can be led to justify and defend nearly anything.

 

A lot of people can resist financial incentives; cultural and tribal incentives are more seductive.

 

Now You Get It

 

Nothing is more persuasive than what you’ve experienced firsthand.

 

The Social Security Act was passed in 1935, 372–33 in the House of Representatives and 77–6 in the Senate.

 

In 1943 Franklin Roosevelt effectively capped incomes at the equivalent of $400,000 per year, with everything above that taxed at 94 percent. He was reelected in a landslide the next year.

 

Jim Carrey once said, “I think everybody should get rich and famous and do everything they ever dreamed of so they can see that it’s not the answer.”

 

Time Horizons

 

Saying “I’m in it for the long run” is a bit like standing at the base of Mount Everest, pointing to the top, and saying, “That’s where I’m heading.” Well, that’s nice. Now comes the test. Nothing will ever separate us. We will probably be married another ten years. —ELIZABETH TAYLOR, FIVE DAYS BEFORE FILING FOR DIVORCE

 

Benjamin Graham said, “The purpose of the margin of safety is to render the forecast unnecessary.” The more flexibility you have, the less you need to know what happens next.

 

Trying Too Hard

 

There are no points awarded for difficulty.

 

MIT cancer researcher Robert Weinberg once described it this way: You can’t die from cancer if you don’t get cancer in the first place. But that simple truth is easy to overlook, because it’s not intellectually stimulating.

 

When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles—generally three to twelve of them—that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.

 

Wounds Heal, Scars Last

 

What have you experienced that I haven’t that makes you believe what you do? And would I think about the world like you do if I experienced what you have?

 

By 1960 it was one of the fastest-growing economies in the world. Its GDP increased from $91 billion in 1965 to $1.1 trillion in 1980, with technology and manufacturing rivaling and surpassing any other region in the world.

 

But usually a better question is, “What have you experienced that I haven’t that makes you believe what you do? And would I think about the world like you do if I experienced what you have?”