Category: Uncategorized

“Expectations are healthier than forecasts because they provide a vision of the future stripped of all false precision.”


Morgan Housel, 2020:

Studying history can feel like intellectual candy that offers no practical use to investors who are paid to foresee the future. But once you accept how fragile our assumptions of the future are, you realize that forecasts are the real fluff and history is where the meat is.

Accepting that forecasts have little use doesn’t mean you become a blind fatalist. When you pay more attention to history than forecasts you pick up on the patterns that guide how people respond to unforeseen events, which – given how stable behavior is over time – is the next best thing to knowing what will happen next.

Forecasts rely on knowing when something will occur. Expectations are an acknowledgment of what’s likely to occur without professing insight into when it will happen.

Expectations are healthier than forecasts because they provide a vision of the future stripped of all false precision. If you know a recession will occur at some point, you won’t be that surprised whenever it arrives – which is a huge benefit. But if you assume you know exactly when it will occur you’ll be tempted into all kinds of dangerous behavior, leveraged with overconfidence. And you’ll be shocked when time passes and what you thought would occur hasn’t happened (yet).

“It costs time and money to access a lot of true and important information, while a lot of bullshit is completely free.”


Nathan J. Robinson, from 2020:

Paywalls are justified, even though they are annoying. It costs money to produce good writing, to run a website, to license photographs. A lot of money, if you want quality. Asking people for a fee to access content is therefore very reasonable. You don’t expect to get a print subscription to the newspaper gratis, why would a website be different? I try not to grumble about having to pay for online content, because I run a magazine and I know how difficult it is to pay writers what they deserve.

But let us also notice something: the New York Times, the New Yorker, the Washington Post, the New Republic, New York, Harper’s, the New York Review of Books, the Financial Times, and the London Times all have paywalls. Breitbart, Fox News, the Daily Wire, the Federalist, the Washington Examiner, InfoWars: free! You want “Portland Protesters Burn Bibles, American Flags In The Streets,” “The Moral Case Against Mask Mandates And Other COVID Restrictions,” or an article suggesting the National Institutes of Health has admitted 5G phones cause coronavirus — they’re yours. You want the detailed Times reports on neo-Nazis infiltrating German institutions, the reasons contact tracing is failing in U.S. states, or the Trump administration’s undercutting of the USPS’s effectiveness — well, if you’ve clicked around the website a bit you’ll run straight into the paywall. This doesn’t mean the paywall shouldn’t be there. But it does mean that it costs time and money to access a lot of true and important information, while a lot of bullshit is completely free.

“Taking temporarily high rates of annual exponential growth as indicators of future long-term developments is a fundamental mistake.”


Vaclav Smil, writing in Growth: From Microorganisms to Megacities (2019)

Taking temporarily high rates of annual exponential growth as indicators of future long-term developments is a fundamental mistake — but also an enduring habit that is especially favored by uncritical promoters of new devices, designs, or practices: they take early-stage growth rates, often impressively exponential, and use them to forecast an imminent dominance of emerging phenomena.

Many recent examples can illustrate this error, and I have chosen the capacity growth of Vestas wind turbines, machines leading the shift toward the de-carbonization of global electricity generation. This Danish maker began its sales with a 55 kW machine in 1981; by 1989 it had a turbine capable of 225 kW; a 600 kW machine was introduced in 1995; and a 2 MW unit followed in 1999. The best-fit curve for this rapid growth trajectory of the last two decades of the 20th century (five-parameter logistic fit with R2 of 0.978) would have predicted designs with capacity of nearly 10 MW in 2005 and in excess of 100 MW by 2015. But in 2018 the largest Vestas unit available for onshore installations was 4.2 MW and the largest unit suitable for offshore wind farms was 8 MW that could be upgraded to 9 MW (Vestas 2017a), and it is most unlikely that a 100 MW machine will be ever built.

This example of a sobering contrast between early rapid advances of a technical innovation followed by inevitable formation of sigmoid curves should be recalled whenever you see news reports about all cars becoming electric by 2025 or new batteries having impressively higher energy densities by 2030.

“Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same.”


Dean Williams, 1981:

One of the most consuming uses of our time, in fact, has been accumulating information to help us make forecasts of all those things we think we have to predict. Where’s the evidenced that it works? I’ve been looking for it. Really. Here are my conclusions: Confidence in a forecast rises with the amount of information that goes into it. But the accuracy of the forecast stays the same. And when it comes to forecasting—as opposed to doing something—a lot of expertise is no better than a little expertise. And may even be worse. The consolation prize is pretty consoling, actually. It’s that you can be a successful investor without being a perpetual forecaster.

We have security analysts. We get research reports from brokers. We get forecasts about the economy, interest rates, the stock market. We process that information and act on the basis of it. For all of that to make any sense, we all have to believe we can generate information which is unknown to the market as a whole.

There is an approach which is simpler and probably stands a better chance of working. Spend your time measuring value instead of generating information. Don’t forecast. Buy what is cheap today. Let other people deal with the odds against predicting the future.

“Trying Too Hard”, Financial Analysts Federation Seminar 1981 (PDF)

“There is no excuse to persist in irresponsible spending.”


The Rational Walk:

Compound interest is merely one example of an exponential function. Human beings have great trouble thinking in exponential terms. It is far easier to think in linear terms and, because this is our natural instinct, most people vastly underestimate the power of investing over a long lifetime. Compounding takes a long period of time to work its magic and we live in a society that prizes instant gratification above all else.

Part of getting older is gaining insight into the reality that living a good life has far more to do with factors such as health and family that simply cannot be purchased with money. However, money is definitely a prerequisite for living a secure life. Since poverty almost always guarantees misery and since anyone in the middle class or higher can easily attain financial independence over a lifetime, there is no excuse to persist in irresponsible spending. Your future self will thank your present self for being prudent and sensible.

“You don’t need more time; you need more focus.”


Shane Parrish:

As the adage goes, if you do what everyone else does, you’ll get the same results everyone else gets. Extraordinary success requires misunderstood choices.

Bill Gates once had the radio removed from his car. When asked why, he said he didn’t want any distractions from thinking about Microsoft. This level of single-minded focus is what builds empires.

Distractions are the assassins of great work. You don’t need more time; you need more focus. Time expands when we eliminate interruptions – our attention, not the clock, ultimately limits what we can achieve.

“Jews believe that they are bearers of a unique covenant with God.”


Sam Harris, writing in The End of Faith: Religion, Terror, and the Future of Reason (2004):

The gravity of Jewish suffering over the ages, culminating in the Holocaust, makes it almost impossible to entertain any suggestion that Jews might have brought their troubles upon themselves. This is, however, in a rather narrow sense, the truth. Prior to the rise of the church, Jews became the objects of suspicion and occasional persecution for their refusal to assimilate, for the insularity and professed superiority of their religious culture — that is, for the content of their own unreasonable, sectarian beliefs. The dogma of a “chosen people,” while at least implicit in most faiths, achieved a stridence in Judaism that was unknown in the ancient world. Among cultures that worshiped a plurality of Gods, the later monotheism of the Jews proved indigestible. And while their explicit demonization as a people required the mad work of the Christian church, the ideology of Judaism remains a lightning rod for intolerance to this day. As a system of beliefs, it appears among the least suited to survive in a theological state of nature. Christianity and Islam both acknowledge the sanctity of the Old Testament and offer easy conversion to their faiths. Islam honors Abraham, Moses, and Jesus as forerunners of Muhammad. Hinduism embraces almost anything in sight with its manifold arms (many Hindus, for instance, consider Jesus an avatar of Vishnu). Judaism alone finds itself surrounded by unmitigated errors. It seems little wonder, therefore, that it has drawn so much sectarian fire. Jews, insofar as they are religious, believe that they are bearers of a unique covenant with God. As a consequence, they have spent the last two thousand years collaborating with those who see them as different by seeing themselves as irretrievably so. Judaism is as intrinsically divisive, as ridiculous in its literalism, and as at odds with the civilizing insights of modernity as any other religion. Jewish settlers, by exercising their “freedom of belief” on contested land, are now one of the principal obstacles to peace in the Middle East. They will be a direct cause of war between Islam and the West should one ever erupt over the Israeli-Palestinian conflict.

“You are not going to get very far in life based on what you already know.”


Charlie Munger, speaking at USC Law School Commencement in 2007:

Wisdom acquisition is a moral duty. It’s not something you do just to advance in life. As a corollary to that proposition which is very important, it means that you are hooked for lifetime learning. And without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know. You’re going to advance in life by what you learn after you leave here.

I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.

Just as civilization can progress only when it invents the method of invention, you can progress only when you learn the method of learning.

Nothing has served me better in my long life than continuous learning.

“It would be naïve to depend on the Supreme Court to defend the rights of poor people, women, people of color, dissenters of all kinds.”


Howard Zinn, 2005:

It would be naïve to depend on the Supreme Court to defend the rights of poor people, women, people of color, dissenters of all kinds. Those rights only come alive when citizens organize, protest, demonstrate, strike, boycott, rebel, and violate the law in order to uphold justice.

The Constitution gave no rights to working people: no right to work less than 12 hours a day, no right to a living wage, no right to safe working conditions. Workers had to organize, go on strike, defy the law, the courts, the police, create a great movement which won the eight-hour day, and caused such commotion that Congress was forced to pass a minimum wage law, and Social Security, and unemployment insurance.

The right of a woman to an abortion did not depend on the Supreme Court decision in Roe v. Wade. It was won before that decision, all over the country, by grassroots agitation that forced states to recognize the right. If the American people, who by a great majority favor that right, insist on it, act on it, no Supreme Court decision can take it away.

The rights of working people, of women, of Black people have not depended on decisions of the courts. Like the other branches of the political system, the courts have recognized these rights only after citizens have engaged in direct action powerful enough to win these rights for themselves.

No Supreme Court, liberal or conservative, will stop the war in Iraq, or redistribute the wealth of this country, or establish free medical care for every human being. Such fundamental change will depend, the experience of the past suggests, on the actions of an aroused citizenry, demanding that the promise of the Declaration of Independence — an equal right to life, liberty, and the pursuit of happiness — be fulfilled.

“Any fool can make a fortune. It takes a man of brains to hold on to it after it is made.”


Arthur T. Vanderbilt II, quoted in Fortune’s Children: The Fall of the House of Vanderbilt (1989):

Within thirty years after the death of Commodore Vanderbilt in 1877, no member of his family was among the richest people in the United States, having been supplanted by such new titans as Rockefeller, Carnegie, Frick, and Ford. Forty-eight years after his death, one of his direct descendants died penniless. Within seventy years of his death, the last of the great Vanderbilt mansions on Fifth Avenue had made way for modern office buildings. When 120 of the Commodore’s descendants gathered at Vanderbilt University in 1973 for the first family reunion, there was not a millionaire among them.

“Any fool can make a fortune,” the Commodore had told his son William, whom he still called Billy, shortly before he died. “It takes a man of brains to hold on to it after it is made.”

“Americans today are no wiser than the Europeans who saw democracy yield to fascism, Nazism, or communism in the twentieth century. Our one advantage is that we might learn from their experience.”


Timothy Snyder, writing in On Tyranny: Twenty Lessons from the Twentieth Century (2017):

Americans today are no wiser than the Europeans who saw democracy yield to fascism, Nazism, or communism in the twentieth century. Our one advantage is that we might learn from their experience.

Does the history of tyranny apply to the United States? Certainly the early Americans who spoke of “eternal vigilance” would have thought so. The logic of the system they devised was to mitigate the consequences of our real imperfections, not to celebrate our imaginary perfection. We certainly face, as did the ancient Greeks, the problem of oligarchy—ever more threatening as globalization increases differences in wealth. The odd American idea that giving money to political campaigns is free speech means that the very rich have far more speech, and so in effect far more voting power, than other citizens. We believe that we have checks and balances, but have rarely faced a situation like the present: when the less popular of the two parties suppresses voting, claims fraud when it loses elections, and controls the majority of statehouses.

Another early American proverb held that “where annual elections end, tyranny begins.” Will we come to see the elections of 2024 much as Russians see the elections of 1990, or Czechs the elections of 1946, or Germans the elections of 1932? This, for now, depends upon us. Much needs to be done to fix the gerrymandered system so that each citizen has one equal vote, and so that each vote can be simply counted by a fellow citizen. We need paper ballots, because they cannot be tampered with remotely and can always be recounted. We need to remove private funding from what should be public campaigns for office. We will have to take seriously our own Constitution, which forbids oath-breaking insurrectionists from running for office. This sort of work can be done at the local and state levels. Any future elections will be a test of American traditions.

On believing in truth:

You submit to tyranny when you renounce the difference between what you want to hear and what is actually the case. This renunciation of reality can feel natural and pleasant, but the result is your demise as an individual—and thus the collapse of any political system that depends upon individualism.

Fascists despised the small truths of daily existence, loved slogans that resonated like a new religion, and preferred creative myths to history or journalism. They used new media, which at the time was radio, to create a drumbeat of propaganda that aroused feelings before people had time to ascertain facts. And now, as then, many people confused faith in a hugely flawed leader with the truth about the world we all share.

“What is truth?” Sometimes people ask this question because they wish to do nothing. Generic cynicism makes us feel hip and alternative even as we slip along with our fellow citizens into a morass of indifference. It is your ability to discern facts that makes you an individual, and our collective trust in common knowledge that makes us a society. The individual who investigates is also the citizen who builds. The leader who dislikes the investigators is a potential tyrant.

“The lottery’s only objective is to maximize the funds you pay for educational activities.”


Salil Mehta:

One should remember that the only objective for the Lottery, anywhere in the world, is not to make you rich. Contrary to their advertisements, the objective is not to show you a good time. Wasting your money is never a good time. The lottery’s only objective is to maximize the funds you pay for educational activities. The lottery does this by taking all of the proceeds, then first diverting nearly 45% of it towards educational benefits, and also towards store commissions and advertisements designed to trick you into spending more into the system. Say you played 292 million times with hypothetically a $1 ticket, and then won exactly one time. In this case your reward would not be anywhere close to $292m. The funnel would start at a gross level of just 55% of $292m (or a loss of $131m on your ticket purchases since 45% was skimmed straight away to the government). And then your net amount would still be less than this 55% gross payout, since this reward is again taxed as income. There is nothing sexy about this arrangement; it extorts a non-tax deductible dollar from you and many others, who could least afford it. And each time putting offering 55 cents into a community savings jar, until one day that amassed jar is given to basically just one person at random (but not before the government comes back to tax that jar as “income”). The whole scheme is an educational tax for those who instead could use a free education in probability theory.

“Because there’s an endless amount of data available to us and we have a limited bandwidth to conserve, we might consider carefully curating the quality of what we allow in.”


Rick Rubin, writing in The Creative Act: A Way of Being (2023):

Broadening our practice of awareness is a choice we can make at any moment.

It is not a search, though it is stoked by a curiosity or hunger. A hunger to see beautiful things, hear beautiful sounds, feel deeper sensations. To learn, and to be fascinated and surprised on a continual basis.

In service of this robust instinct, consider submerging yourself in the canon of great works. Read the finest literature, watch the masterpieces of cinema, get up close to the most influential paintings, visit architectural landmarks. There’s no standard list; no one has the same measures of greatness. The “canon” is continually changing, across time and space. Nonetheless, exposure to great art provides an invitation. It draws us forward, and opens doors of possibility.

If you make the choice of reading classic literature every day for a year, rather than reading the news, by the end of that time period you’ll have a more honed sensitivity for recognizing greatness from the books than from the media.

This applies to every choice we make. Not just with art, but with the friends we choose, the conversations we have, even the thoughts we reflect on. All of these aspects affect our ability to distinguish good from very good, very good from great. They help us determine what’s worthy of our time and attention.

Because there’s an endless amount of data available to us and we have a limited bandwidth to conserve, we might consider carefully curating the quality of what we allow in.

This doesn’t just apply if your goal is to make art of lasting significance. Even if your goal is to make fast food, it will likely taste better if you experience the best fresh food available to you during the process. Level up your taste.

The objective is not to learn to mimic greatness, but to calibrate our internal meter for greatness. So we can better make the thousands of choices that might ultimately lead to our own great work.