♾️ Same as Ever book summary

Wisdom Letter #233

Just finished the book “Same as Ever” by Morgan Housel. It’s a great book, much like his previous book The Psychology of Money.

Key Takeaways

• The book is about the principles that have stood the test of time, enhancing our capacity to navigate the future. Stuff that has already happened in history, and will keep happening in the future.

• Understanding risk involves recognising the limits of prediction and advocating for a broad scope of preparedness instead.

• Probability and decision-making in uncertainty is crucial. wing that expecting precise outcomes can hinder our judgment, and unlikely events are, paradoxically, common due to their sheer volume.

The central idea is that some aspects of life and society remain constant. Recognising these constants not only enhances our understanding of the world but also aids in projecting future trends.

My favorite chapter was the one about risk.

Risk is what we don’t see.

The January 2020 edition of The Economist forecast for the year didn’t contain a single word about COVID-19. Nothing wrong with the economist, the pandemic was an unforseeable event. And that’s precisely why it was risky.

If you can foresee something, you can prepare for it, then it’s not a risk anymore.

This short clip of Morgan Housel explaining Risk on the Tim Ferris podcast is great -

Then how do you mitigate for unforseeable risk?

An analogy is drawn with California's earthquake preparation, exemplifying how investing in preparation, rather than attempting to predict, can mitigate unavoidable risks.

This is similar to Taleb’s idea of The Black Swan and why it’s such a grave risk. I wrote about The Black Swan effect long back when Covid-19 was just getting started. Back in wisdom letter #28

Same as Every by Morgan Housel is a great book. Do read it, and if you’re short on time, then watch this review from Nat Eliason

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That’s it for today.

See you next week 👋

We’ll be back with more interesting notes, highlights and curations.

Cheers,

Ayush & Aditi