Exploring long-term investments and the concept of survivorship bias. Introducing a framework to avoid reality distortion.
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Quick takeaways
Invest in purpose-driven work and relationships for long-term success.
Beware of survivorship bias and consider all outcomes for accurate understanding of reality.
Deep dives
Identifying Forever Hold Investments
When considering long-term investments, it is crucial to focus on assets that can be held forever. These could be purpose-driven work, such as building a personal platform to positively impact millions of people. Additionally, investing in relationships with loved ones and prioritizing physical health by exercising, eating well, and getting enough sleep are also valuable forever hold investments. By consistently directing energy towards these areas, individuals can experience a sense of flow in their lives.
Avoiding Survivorship Bias
Survivorship bias can distort our perception of reality and lead to flawed conclusions. The story of Abraham Wald highlights this cognitive bias, where focusing on successful outcomes while ignoring failures can skew our understanding of success rates. To avoid survivorship bias, it is essential to acknowledge the unseen evidence and consider the entire range of outcomes. By recognizing that what is unseen can have as much value as what is seen, we can gain a more accurate understanding of reality.
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Long-Term Investments and Avoiding Survivorship Bias