Amazon founder Jeff Bezos once said that people often ask him about his trends in the next 10 years. "But almost no one has ever asked me: 'What's not going to change in the next 10 years?' I think that's the more important question. ”
Bezos said that there is no doubt that in the future, Amazon's customers will continue to pursue low prices and fast logistics, so the company will continue to invest a lot of money in these aspects.
The things that are eternal and constant are important because we believe they shape our future. This applies to all aspects of our lives.
We may not be able to predict what the stock market will look like next year or any year, but we can be sure that human greed and fear will never change.
Therefore, Morgan Hauser, the author of "The Psychology of Money", has spent a lot of time thinking about this issue, and has condensed the results of his thinking into his new book "As Always", sharing with readers the eternal and unchanging laws of human existence that he has observed and experienced, but contain infinite wisdom and possibility.
"As always"
By Morgan Hauser
Translated by Song Hongbo and Fu Litao
2024-4 CITIC Publishing Group
Morgan Hauser, a partner at The Collaborative Fund, is a two-time winner of the Best Business Writing Award from the Business Editors and Writers Guild of America, a Sidney Award from The New York Times, and a two-time finalist for Gerald Loeb's Outstanding Business Journalism Award.
Morgan Hauser
As soon as the new book Same as Ever was published, many readers in China were looking forward to the introduction of the Chinese version, and Ashin naturally lived up to expectations.
The book's subtitle is "Unchanging Human Nature and the Wealthy Mentality", and Morgan Hauser is a master of explaining the truth, and there are a total of 23 fascinating short stories in the book, which revolve around human nature and wealth.
When recommending this book, Mr. Wan Weigang said: "Hauser's views in this book are not in line with the education you have received. If you are rarely exposed to such thinking, your perception will definitely need to be restructured. ”
For example, "long-termism", Hauser said that only a very small number of things are applicable to long-termism, and most things are time-sensitive;
For example, "risk", Hauser said, is not what you have anticipated, but what is unexpected is risk;
For example, "optimism and pessimism", Hauser said, the best financial plan is to save pessimistically and invest optimistically.
As the title of the book implies, "As always," Voltaire once said, "History never repeats itself, but mankind often repeats itself." Here are just a few of the things Hauser shares in his book about how people tend to "repeat the mistakes of the past."
The future is unpredictable! Unpredictable!
One of the ironies of studying history is that we often know exactly how something ends, but we don't know its causes.
For example, what caused the 2008 financial crisis?
– To get back to the roots, we have to understand the mortgage market.
What Makes the Mortgage Market?
– We must first understand the decline in interest rates over the past 30 years.
What is causing interest rates to fall?
- We must understand the inflation situation in the 70s of the 20th century.
What caused the inflation at the time?
- We must understand the monetary system of the 70s of the 20th century and the aftermath of the Vietnam War.
And what sparked the Vietnam War?
- We must understand the "cold war".
And all that.
It is often said that the future can only be predicted if we understand history. But in reality, we have to admit that knowing the past does not mean that we can predict the future. The development of things is always intricate and unfathomable.
In his new book, As Always, Hauser says there are two things he keeps in mind.
First things first: Predict the future based on people's behavior, not specific events, and while it's impossible to predict what the world will look like in 50 years' time, I'm convinced that people will still be trapped in the same way by many issues, such as greed, fear, opportunity, exploitation, risk, uncertainty, racial identity, and social persuasion.
The second thing: the thing to keep in mind is to dare to imagine. No matter what the world looks like today, no matter what is going on right now, tomorrow everything can change, and the cause of change can also be something as small as it may seem insignificant. The development of things is like the law of compound interest in finance, a small change at the beginning does not know how big the subsequent development will be.
The risk is unforeseeable
People may happen to be able to predict a little bit about future trends, but they can never predict the unexpected, and anticipating the unexpected is the key.
The biggest risks are always those that no one expected. Because no one expected it, no one prepared; Because there is no one to prepare, the damage is doubled.
When we look back at the most influential events in history – the coronavirus pandemic, the 9/11 terrorist attacks, Pearl Harbor, the Great Depression, and so on, the common denominator is that they were all unexpected – that is, almost no one found the clues before they happened.
You can't prepare for something you didn't expect.
However, in his new book, As Always, Hauser argues that there are two events that can lead you to think about how to deal with risk more effectively.
First, expectations are more meaningful than predictions. As Taleb puts it: "The focus of investment is on preparation, not forecasting." "Anticipation and prediction are two different things, and even if you don't know when and where the risk will occur, you need to anticipate that the risk will eventually happen, rather than relying solely on the prediction. In fact, almost all of the predictions are either nonsense or well-known.
Second, be mentally prepared for not being able to cope with the risk. In many cases, being caught off guard by an unexpected turn is not due to a lack of prior planning. Sometimes, even the world's brightest planners work around the clock to anticipate every possible risk, and in the end, it is possible to fail. They planned for every risk that seemed possible, only to be hit hard by the unexpected.
The first rule of happiness is to lower expectations
As early as 275 years ago, Montesquieu wrote, "If you want to be happy, it's easy; But if you want to be happier than others, it's hard because we always overestimate the happiness of others. ”
You can see how important it is to manage expectations if you want to live a happy life!
The famous historian David McCullough once wrote: "For many, Roosevelt's death was not only the fall of a great man, but more importantly the mediocrity of his successor, Truman." But today, in the eyes of historians, Truman has been one of the top 10 presidents in American history, often even ahead of Roosevelt.
This was partly due to the low expectations of Truman, which made any leadership qualities he displayed during his tenure impressive. In the eyes of the public, his small achievements are big achievements, and big successes are miracles.
As a result, the reality does not have a great impact on people's mood, but rather a large gap between expectations and reality.
To this end, in his new book, As Always, Hauser says you need to do two things.
Number one: Keep reminding yourself that wealth and happiness are an equation of what you have on one side and what you want or need on the other. Both sides of the equation are equally important, and it would be pointless to focus on building wealth without controlling expectations, especially since it is relatively easy to do so.
The second point is to understand the laws of anticipation. We often think that we have to strive for excellence for ourselves and the world. But most of the time, that's not what we really want. What we really want is to feel the gap between what we are doing and what we expect. Therefore, the anticipatory end of the equation is not only important, but also more controllable than changing reality.
Good stories have a leverage effect
People are mostly busy and emotional, so it's more engaging to tell a great story than to quote a long list of cold data.
Here are two examples:
When it comes to stock valuation, Professor John Burr Williams has more insights than Benjamin Graham. However, Graham's ability to articulate himself has led him to become a legend in the investment world, with millions of copies sold in his books.
Everyone knows that the sinking of the "Titanic" killed more than 1,500 people. But there is little mention of the sinking of the Chinese passenger liner Jiang Ya in 1948, which killed more than 3,000 people.
How to leverage the power of a good story? In As Always, Hauser gives two suggestions:
When talking about complex, incomprehensible knowledge, stories are like levers. Just as debt leverage can leverage assets, expressing deep ideas through a story can do more with less. Ken Burns once said, "The average story tells that one plus one equals two." We all understand this, and it makes sense. But a good story will tell that one plus one equals three. "That's the leverage of the story.
The most convincing stories are those that people believe in, or that come from people's own experiences. The poet Ralph Hodgson brilliantly summed it up: "There are things that can only be seen if you believe them." "A story, even if it's not as true, can be convincing if it just fulfills people's desires or strengthens their beliefs.
The Law of Scale
An idea that is good can quickly turn into a bad idea when over-reinforced.
When a person steps out of the bathtub after bathing, the amount of water that drips from his body is almost 0.5 kilograms, and this weight has little effect on the person. But if the rat gets soaked, it will be too heavy to crawl. Similarly, wet flies will be so heavy that they will not be able to fly on their stomachs. It can be seen that the same behavior has very different effects on animals of different sizes.
Each animal has its optimal body shape for survival, and changes in body size must be matched by corresponding morphology.
We can call this concept "optimal size," a state of suitability in which things are supposed to function properly. If you scale up or speed things up, the original match will be broken.
It applies to many things in life.
When a team grows from four to 100, 100,000, or even 100 million, people approach risk and responsibility in a completely different way.
In a world where the jungle is the strongest, growth is a good thing. But forced growth, accelerated growth, and artificial intervention are often counterproductive.
Most important things in life, whether it's love, career, or investment, have value from two things: patience and scarcity. Patience refers to doing things step by step and going with the flow; Scarcity refers to valuing the unique value that something ultimately fulfills.
However, what are the two most common strategies when people pursue their ambitions? Accelerate and scale.
This problem has always existed and will always be
Endure pain when necessary
Every thing worth pursuing comes with a little bit of pain. The trick is not to care about the pain.
There is such a scene in the movie "Lawrence of Arabia" where Lawrence snuffs out a burning match with his fingers and does not change his face. One person saw it and tried it, but he screamed "wow" in pain.
"It hurts! Do you have any tips?" He asked Lawrence.
"The trick is to endure the pain." Lawrence replied.
Endure pain when necessary, and don't always think about whether there is a free ride, whether there is a shortcut. This is a very useful life skill. Shortcuts are alluring because they make it seem like success is easy.
However, there are very few shortcuts in the real world.
Charlie Munger once said, "The surest way to get what you want is to make your efforts worthy of it."
Former U.S. President Franklin D. Roosevelt was once the most powerful man in the world, but because of his paralysis, he needed help even to get to the bathroom. He once said: "If you can't walk on your own and you want orange juice and someone else gives you milk, you have to learn to say 'it's okay' and drink the milk." ”
Although all walks of life are different, a universal rule is that you have to accept some troubles according to the requirements of reality.
Competitive advantage will eventually disappear
Paleontologist Edward Kopp has traced the genealogy of thousands of species and found that species tend to grow in size during evolution, a discovery that is later known as the "law of science".
Horses have evolved from the size of a puppy to their current size; The snake evolved from about 2.5 centimeters to the modern python; And humans have evolved from the average adult height of 1.2 meters millions of years ago to the current height.
The question is, why hasn't evolution made all species huge?
Scientists Aaron Clauset and Douglas Owen explain: "The tendency of evolution to create larger species cancels out the tendency for larger species to become more susceptible to extinction." ”
Body type in biology is like leverage in investing: magnifying gains, but also magnifying losses. After a period of normal operation, it often has a major reversal when it reaches a point where the benefits are considerable but the losses can be fatal.
Evolution encourages species to become large, but large enough to punish them.
There are signs in every sector that competitive advantage is not always sustainable.
In "As Always," Hauser points out five factors that can weaken competitive advantage.
First, success leads to confidence that you can't make mistakes. Scale fuels success, success breeds hubris, and hubris is the beginning of failure.
Second, the strategies for success are not the same. The story of a fund manager who performed well 10 years ago has been mediocre for the next 10 years, in part because of bad luck.
Third, people gain a competitive advantage by working hard with the aim of not having to work so hard in the future. Since hard work is to achieve the goal, and once the goal is achieved, it is natural that you will release the pressure and not be tense all the time. It was also at this time that competitors crept in and things changed.
Fourth, skills that are valuable in one era may not be valuable in the next.
Fifth, success depends on the right time and place. People often find out in hindsight that luck is behind a lot of success, which is both helpless and difficult to accept.
No one is safe forever. No one can stop.
It's hard to stick to long-termism
Long-termism is easier said than done. Most people know that whether in investment, in the workplace or in relationships, as long as there is a compound interest effect, adhering to long-termism is the right strategy.
But saying "I'm going to take a long-term view" is a bit like standing at the foot of Mount Everest, pointing to the top and saying, "That's where my heart is." Sounds great, but the real test is yet to come.
Adhering to long-termism is harder than most people think, which is why true long-termism is more beneficial than people think.
Anything of value comes at a price, but the cost isn't always obvious. The cost of long-termism, such as the necessary skills, a stable mindset, etc., can easily be underestimated. Moreover, long-termism is often summed up simply as "be more patient", which does not explain why so many people fail to practice long-termism.
If you want to practice long-termism effectively, you must understand the following.
The long term is made up of many short periods that you have to go through.
It's not enough for you to stick to long-termism, but also for your partners, colleagues, partners, and friends.
Patience is not stubbornness.
Long-termism emphasizes time span and more flexibility.
Entrepreneur and investor Nawal once said, "If there were 1,000 parallel worlds, you would wish you could make a fortune in 999 of them." You don't want to make a fortune out of just 50 of them by luck, so we're going to take the luck factor out of the equation... If there are 1000 choices, I hope to succeed in 999 of them! ”
So, if there are 1000 parallel worlds, what kind of universal truth applies to each of them?
That's exactly what Hauser wants to share with readers in his new book, As Always.
"As always"
By Morgan Hauser
Translated by Song Hongbo and Fu Litao
2024-4 CITIC Publishing Group
Everyone wants to see the future, but no one can really do it in the fields of financial investment, business, economics, politics, sociology, etc.
We must admit that the world is forever changing, and the unknown is unpredictable. But for thousands of years, human behavior has remained the same as it has always been.
Humanity is as deep as ever in greed and fear;
Humanity, as always, is plagued by issues of risk, jealousy, identity, and so on;
Humanity, as always, seeks certainty that does not exist at all;
As always, human beings are looking for the secret of a happy life.
It is precisely those eternal human actions that contain the most profound historical experience, because they can predict the future of everyone.
Regardless of your status, age, or financial status, you will be able to learn some eternal lessons from these human actions and benefit immensely.
"As always"
Timeless wisdom about money, life, narrative, ambition and fulfillment
Luo Yonghao, Zhu Ning, Wanwei Steel, De Buhua, etc