The Rational Reminder Podcast

Episode 290 - Morgan Housel: Same as Ever

Feb 1, 2024

01:07:53

Snipd AI

Renowned author and commentator Morgan Housel discusses his latest book 'Same as Ever: A Guide to What Never Changes' on the podcast. They explore timeless principles, the importance of holding cash, challenging traditional approaches, and the value of storytelling. They also discuss the recurrent nature of once-in-a-lifetime events, the pitfalls of seeking certainty, and the complex interplay between incentives and expectations. Gain insights into forecasting behaviors, the allure of pessimism, and embracing slight inefficiencies on the path to success.

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Quick takeaways

Understanding the timeless principles of human behavior can help navigate uncertainty in finance and investing.

Unexpected, once-in-a-lifetime events are more common than expected and have a greater impact than predicted events.

Striking a balance between stress and growth is essential for long-term success, with stress acting as an incentive for innovation and problem-solving.

Deep dives

Understanding the importance of what never changes

In this podcast episode, the guest, Morgan Housel, discusses his most recent book, Same as Ever, A Guide to What Never Changes. Housel emphasizes the significance of understanding the things that remain constant over time, particularly in the realm of finance and investing. He argues that while forecasting future changes is difficult, focusing on human behaviors and reactions to greed, fear, risk, and uncertainty can provide valuable insights. By acknowledging the unchanging aspects of human behavior, individuals can gain a better understanding of the future, even if the specifics are uncertain.

Introduction

4min

Unforeseen Events and the Importance of Saving

11min

The Illusion of Certainty

16min

The Role of Fear and Paranoia in Success

22min

Unforeseen Impact of Innovations

3min

The Illusion of Social Media

5min

The Length of Nonfiction Books and Signaling Effort

2min

Beliefs, Perspectives, and Personal Experiences

5min

In this episode, we are joined, for the third time, by renowned author and commentator Morgan Housel. Many of you are familiar with Morgan's bestseller, The Psychology of Money, and he is back to discuss his latest book, Same as Ever: A Guide to What Never Changes. He is also the partner at The Collaboration Fund, a network of fund managers investing across asset classes while identifying and supporting companies at the intersection of for-profit and for-good. In our conversation, we delve into the timeless principles that shape our perspectives of the world and why things are the Same as Ever. We discuss the importance of holding cash, challenging traditional analytical approaches and encouraging a broader reflection on life beyond numbers. Discover the recurrent nature of once-in-a-lifetime events, the pitfalls associated with the insatiable desire for certainty, the value and power of storytelling, and the complex interplay between incentives and expectations. Gain insights into the value of forecasting behaviours instead of market dynamics, why pessimism is more common and more captivating than optimism, embracing slight inefficiencies on the path to success, and much more! Don't miss this engaging discussion with a master storyteller and gain new perspectives on finance, human behaviour, and the principles that remain the Same as Ever with Morgan Housel. Tune in now!

Key Points From This Episode:

(0:03:28) Why it is important to understand the aspects that never change, with examples.

(0:05:58) Morgan explains the value of random and seemingly inconsequential events.

(0:07:43) Discover the most persistent characteristic of risk and the ways expectations impact behaviour and decision-making.

(0:13:04) How he has been dealing with the success of his book, Psychology of Money.

(0:15:11) What makes once-in-a-lifetime events more common than expected and the problems that a desire for certainty brings with it.

(0:19:16) Leveraging storytelling to understand the world and how to filter out the good information from the bad information.

(0:25:41) Explore the role of incentives in influencing expectations and how calm can turn into crazy.

(0:31:06) Learn how success can develop into failure and the problems that stem from investors trying to squeeze too much too soon from their investments.

(0:37:13) Advice for understanding the normal ‘growth rate’ and what motivates innovation.

(0:42:29) Balancing stress and adversity and why being slightly inefficient is a good thing.

(0:46:46) Navigating hassle and nonsense on the path to success.

(0:48:30) The time scale differences in materializing good news and bad news.

(0:50:31) Strategies for combining optimism and pessimism to make informed and effective long-term decisions.

(0:53:03) Examine the challenges of predicting the impact of future innovations.

(0:55:43) The tendency for people to perceive others or businesses as better.

(0:58:38) Hear about the difference between permanent and expiring information.

(1:00:36) Reasons why complexity and length are appealing and how personal experiences shape perspectives.

(1:05:00) Morgan shares the biggest takeaways from his books.

Links From Today’s Episode:

Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582 Rational Reminder Website — https://rationalreminder.ca/