Morgan Housel Quotes

Daniel Kahneman once told me about the stories people tell themselves to make sense of the past. He said: Hindsight, the ability to explain the past, gives us the illusion that the world is understandable. It gives us the illusion that the world makes sense, even when it doesn’t make sense. That’s a big deal in producing mistakes in many fields.

Karl Pillemer interviewed a thousand elderly Americans looking for the most important lessons they learned from decades of life experience. He wrote: No one — not a single person out of a thousand — said that to be happy you should try to work as hard as you can to make money to buy the things you want. No one — not a single person — said it’s important to be at least as wealthy as the people around you, and if you have more than they do it’s real success. No one — not a single person — said you should choose your work based on your desired future earning power.

Risk is what’s left over when you think you’ve thought of everything.

Money’s greatest intrinsic value — and this can’t be overstated — is its ability to give you control over your time.

A one-hundred-year event doesn’t mean it happens every one hundred years. It means there’s about a 1 percent chance of it occurring in any given year.

Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. They are so similar that you can’t believe in one without equally respecting the other. They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes. They are driven by the same thing: You are one person in a game with seven billion other people and infinite moving parts. The accidental impact of actions outside of your control can be more consequential than the ones you consciously take.

Saving is the gap between your ego and your income.

The safest way to try to get what you want is to try to deserve 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.

If something compounds — if a little growth serves as the fuel for future growth — a small starting base can lead to results so extraordinary they seem to defy logic. It can be so logic-defying that you underestimate what’s possible, where growth comes from, and what it can lead to.

Having a gap between what you can technically endure versus what’s emotionally possible is an overlooked version of room for error.

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

Biologist Leslie Orgel used to say, “Evolution is cleverer than you are,” because whenever a critic says, “Evolution could never do that,” they usually just lacked imagination. It’s also easy to underestimate because of basic math. Evolution’s superpower is not just selecting favorable traits. That part is so tedious, and if it’s all you focus on you’ll be skeptical and confused. Most species’ change in any millennia is so trivial it’s unnoticeable. The real magic of evolution is that it’s been selecting traits for 3.8 billion years. The time, not the little changes, is what moves the needle.

A good definition of an investing genius is the man or woman who can do the average thing when all those around them are going crazy. Tails drive everything.

Bubbles aren’t so much about valuations rising. That’s just a symptom of something else: time horizons shrinking as more short-term traders enter the playing field.