I increasingly don’t believe in gurus, in any field. Everyone puts their pants on one leg at a time and is susceptible to the same derailing faults as everyone else.
Innovation and economics can be miles apart. Twitter directly influences geopolitics between nuclear states and is worth half as much as Progressive Auto Insurance.
Investing is one of the simplest fields run by people who believe in their souls that they’ll do better if they make it more complicated.
Few superpowers are as super as the ability to change your mind. It is so much easier to fool yourself into believing a falsehood than admit a mistake.
Successful investing is having everyone agree with you … later. That means you can’t “ignore the noise” forever. Your success relies on getting the noise, the idiots, and the gamblers to eventually see eye to eye with your thesis.
Some of the richest people are the worst money managers I’ve seen. When money loses the power of scarcity you stop caring about leaks that are meaningful when you’re poorer. And when your life gets complicated you’re more likely to outsource decisions to middlemen who may not have your best interest at heart. It’s an overlooked irony. “Enough money to care but not enough to not care” is the sweet spot for management.
The largest business line items are employee compensation and an attachment to sunk costs.
Most snake oil salesmen believe in their snake oil, because the intersection of needing a paycheck and needing to look yourself in the mirror with pride can be stronger than reason. To paraphrase Kahneman, it’s easier to recognize other people’s flaws than your own.
Things that cause permanent blindness: Luck attributed to skill; Losses that cause a lifestyle downgrade or fewer career options; Unshakeable political beliefs that influence investment decisions; Building a reputation on a single belief that you can’t distance yourself from.
The biggest social problems are opioids, student debt, media distrust, and affordable housing. These are generation-defining issues whose economic incentive to solve is dwarfed by the harm they cause.
Tell people what they want to hear and you can be wrong indefinitely without penalty. Confirmation is in much higher demand than information.
Some things that look unsustainable are new breakthroughs that don’t apply to past trends. Every new industry fits this description. Many market trends do, too. But it’s safer to call something a bubble than predict a new trend because bubbles threaten careers while cheering new ideas makes you look like an aloof salesman.
The same traits needed for outlier success are the same traits that increase the odds of failure. The line between bold and reckless is thin. So be careful blindly praising successes or criticizing failures, as they often made similar decisions with slightly different levels of luck.
Many people are pessimistic with their words but optimistic with their actions. If you say the world is going to hell but still invest in stocks, the latter is probably a more genuine feeling.