#707 - Morgan Housel - 9 Timeless Lessons About Human Psychology

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Nov 16, 2023

Morgan Housel, a partner at The Collaborative Fund and author of "Same as Ever," dives deep into timeless principles of human psychology. He discusses the pitfalls of predictions, the nuances of optimism, and the enduring nature of fear and greed throughout history. Housel emphasizes the power of storytelling over statistics in decision-making and highlights the impact of personal expectations on happiness. He also reflects on the complexities of fame and the dangers of rapid growth, advocating for a thoughtful approach to success.

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INSIGHT

The Problem with Predictions

We are good at predicting, except for surprises, which matter most.
Focus on unchanging human behaviors instead of predicting change.

ANECDOTE

Fragile History

The American Revolution's outcome depended on wind direction one night, says David McCullough.
This fragility of history highlights the unpredictability of the future.

ANECDOTE

Unpredictable Depression

Robert Shiller found no one predicted the Great Depression, not even experts.
The banking crisis, triggered by Creditanstalt's failure, was unforeseen.

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Same as Ever

A Guide to What Never Changes

Morgan Housel

In 'Same as Ever,' Morgan Housel presents a master class on optimizing risk, seizing opportunity, and living a fulfilling life by focusing on what remains constant in a changing world. Through engaging stories and examples, Housel shows how understanding permanent truths about human behavior can help readers make better decisions and navigate uncertainties. The book emphasizes the importance of recognizing and adapting to timeless principles in finance, business, and personal life, rather than trying to predict specific future events[2][4][5].

Ulysses

James Joyce

Ulysses is a groundbreaking and complex modernist novel that chronicles the experiences of three Dubliners over a single day. The novel is loosely based on Homer's epic poem 'The Odyssey', with Leopold Bloom paralleling Odysseus, Stephen Dedalus paralleling Telemachus, and Molly Bloom paralleling Penelope. It explores themes such as antisemitism, human sexuality, British rule in Ireland, Catholicism, and Irish nationalism. The novel is known for its innovative use of language and narrative techniques, including stream-of-consciousness and multiple literary styles. It captures the essence of early 20th-century Dublin, providing a detailed snapshot of the city's social, political, and cultural landscape[2][3][5].

The Psychology of Money

Timeless Lessons on Wealth, Greed, and Happiness

Morgan Housel

In 'The Psychology of Money,' Morgan Housel delves into the psychological and emotional aspects of financial decisions. The book consists of 19 short stories that illustrate how personal history, worldview, emotions, and biases influence financial outcomes. Housel emphasizes the importance of behavior over knowledge in managing money, highlighting the power of compounding, the dangers of greed, and the pursuit of happiness beyond mere wealth accumulation. He advocates for a frugal lifestyle, long-term perspective, and a balanced approach to investing, stressing that financial success is more about mindset and discipline than about technical financial knowledge[2][3][4].

Going Infinite

The Rise and Fall of a New Tycoon

Michael Lewis

In 'Going Infinite', Michael Lewis delves into the life of Sam Bankman-Fried, the enigmatic founder of the failed cryptocurrency exchange FTX. The book provides a psychological portrait and a financial roller-coaster ride, tracing Bankman-Fried's trajectory from becoming the world's youngest billionaire to his eventual downfall. It covers topics such as high-frequency trading, cryptocurrencies, effective altruism, and the justice system. Despite criticism for its sympathetic portrayal of Bankman-Fried, the book offers a fascinating insight into the complex world of cryptocurrencies and the character of its central figure.

The intelligent investor

Jason Zweig

Benjamin Graham

Written by Benjamin Graham, 'The Intelligent Investor' is a seminal work on value investing that has inspired millions since its original publication in 1949. The book emphasizes the importance of distinguishing between investing and speculation, calculating the intrinsic value of companies, and maintaining a margin of safety. The revised edition includes updated commentary by Jason Zweig, who provides modern examples and insights to help readers apply Graham's principles in today's market. Warren Buffett, a disciple of Graham, has praised the book as 'the best book about investing ever written'.

Finnegans Wake

David Hayman

James Joyce

Finnegans Wake is James Joyce's final and most complex work, written over a period of seventeen years. The novel is set in a dream world where the protagonist, Humphrey Chimpden Earwicker (HCE), and his family—wife Anna Livia Plurabelle (ALP) and their children Shem, Shaun, and Issy—undergo various transformations and identities. The book is known for its innovative use of language, combining elements from multiple languages and creating new words through portmanteaus and puns. It explores themes of identity, history, and the cyclical nature of life, drawing on Irish mythology, biblical narratives, and personal experiences. The novel's structure is circular, ending with the sentence that begins the book, creating a continuous loop[3][4][5].

Why Buddhism is True

The Science and Philosophy of Meditation and Enlightenment

Robert Wright

In this book, Robert Wright argues that Buddhism offers a secular, Westernized approach to mindfulness meditation that can help individuals and society by reducing suffering and increasing empathy. He draws on evolutionary biology, psychology, and neuroscience to support Buddhist teachings, such as the concept of 'no-self' and the nature of human suffering. The book is a personal journey that began with Wright's work on evolutionary psychology and deepened through his practice of meditation and conversations with skilled meditators. It aims to show how Buddhist principles can be applied in a secular age to improve individual and societal well-being.

The obstacle is the way

Ryan Holiday

In 'The Obstacle Is the Way', Ryan Holiday presents a framework for turning obstacles into successes. Drawing from the philosophy of Stoicism and the writings of Marcus Aurelius, Holiday outlines three disciplines: perception, action, and will. He illustrates these principles with historical anecdotes from figures such as John D. Rockefeller, Amelia Earhart, Ulysses S. Grant, and Steve Jobs. The book emphasizes the importance of perception in shaping one's response to obstacles, the need for intentional and creative action, and the cultivation of will to persist through challenges. Holiday argues that by adopting these Stoic principles, individuals can transform their obstacles into opportunities for growth and success.