AI Summary #
Here are the key takeaways and insights from the podcast transcription:
The Power of Storytelling: The host emphasizes that stories are more powerful than facts and data in influencing people’s minds. Whoever tells a compelling story is likely to win, even if they have the “right” answer.
Human Nature: Despite advances in technology and medicine, human nature remains relatively constant. People are still driven by emotions like greed, fear, envy, and a desire for certainty. These tendencies can lead to irrational decisions and unpredictable outcomes.
The Limits of Logic: The host notes that logic is an invention of humans, not the universe. Attempting to apply mathematical formulas to complex human behavior can be frustrating and surprising. Emotions and hormones play a much bigger role in shaping our actions than we often think.
Expectations vs. Reality: Our happiness depends on our expectations, which tend to rise with improvements in our circumstances. This means that even if the world gets better for most people, most of the time, individual experiences can still be disappointing if they don’t meet our high standards.
The Cycle of Greed and Fear: The host describes a common cycle where good news leads to complacency, bad news triggers panic, and then both lead to denial. This cycle can repeat indefinitely, leading to instability and unexpected outcomes.
Innovation through Necessity: Big changes and innovations often occur during times of crisis or uncertainty, such as war, recessions, or pandemics. These situations create a sense of urgency and necessity that drives innovation and problem-solving.
Notable quotes include:
- “The best story wins.”
- “Logic is an invention of man and is ignored by the universe.”
- “Calm plants the seeds of crazy.”
- “Necessity is the mother of invention.”
Actionable advice or conclusions from the host’s book, “Same as Ever,” include:
- Focus on telling compelling stories to influence people’s minds.
- Recognize that human nature remains relatively constant despite advances in technology and medicine.
- Be aware of the limitations of logic when dealing with complex human behavior.
- Set realistic expectations and learn to adjust them over time.
- Avoid complacency by recognizing the cycle of greed and fear, and be prepared for unexpected outcomes.
Overall, the host’s book offers a nuanced perspective on human nature, innovation, and the importance of storytelling in shaping our world.
AI Transcription #
Hey everyone, today is a big day for me because my new book, Same as Ever, is out today.
It’s available for sale.
You can go buy it.
I’m really excited for you to get to read it because I think it’s the best work that I’ve ever done.
And I’m really happy with how it turned out.
Books are hard.
They’re a long slog from start to finish that can take years to think about, put together, edit before it finally gets to the shelves as it is today.
But there’s so much fun to put together.
They’re so rewarding.
I’ve honestly been thinking about this book for my entire career.
It’s about a topic that’s always been really dear to me and has shaped a lot of my thinking.
And it wasn’t until three years ago or so that I finally thought, you know what, I have enough material on this idea to put together a book.
And I hope you enjoy reading it, at least half as much as I enjoyed writing it.
The book is going to be translated into 38 languages.
So if you’re listening to this podcast in another country, if it’s not already out in your language, it will be soon.
There’s also an audio book version that was narrated by my good friend Chris Hill.
He was also the narrator for Psychology of Money.
So I just want to spend a few minutes here talking about the idea behind Sam is ever and giving you a little sneak peek at some of the big ideas from the book.
I once had lunch with a guy who’s close with Warren Buffett.
And this guy will call him Jim.
That’s not his real name, but he was driving around Omaha, Nebraska with Warren Buffett in late 2009.
And the global economy was crippled at this point and Omaha was no exception.
Stores were closed and businesses were boarded up.
Jim said to Warren, quote, it’s so bad right now.
How does the economy ever bounce back from this?
Warren said, Jim, do you know what the best selling candy bar was in 1962?
Jim said, no, Snickers, Warren said.
And do you know what the best selling candy bar is today?
No, said Jim.
Snickers said Warren.
And then silence.
That was the end of the conversation.
Same is ever is a book of short stories about what never changes in the changing world.
Every is filled with so many surprises that nobody could have seen coming, but it’s also filled with so much timeless wisdom.
If you traveled back in time to 500 years ago or to 500 years from now, you would be astounded at how much technology and medicine have changed.
The geopolitical order would make no sense to you.
The language and the dialect would be completely foreign to you.
But you would look around and you would notice people falling for greed and fear just like they do in our current world.
You would see people persuaded by risk and jealousy and tribal affiliations in ways that are very familiar to you.
You would see overconfidence and short-sightedness that reminds you of people’s behavior today.
You’d find people seeking the secret to happy life and trying to find certainty when none exists in ways that are entirely relatable to you.
So it transported to an unfamiliar world.
You’d spend a few minutes watching people behave and you would say, ah, I’ve seen this before.
Same as ever.
Change always captures our attention because it’s surprising and it’s exciting.
It’s fun to watch.
But the behaviors that never change are history’s most powerful lessons because they preview what to expect in the future.
Our future, everybody’s future, no matter who you are or where you’re from or how old you are or how much money you make.
There are timeless lessons from human behavior that are some of the most important things you can ever learn in life.
Let me share with you a few insights from my book.
Number one, the best story wins.
Not the best idea and not the right idea or even the most rational idea.
Whoever tells a story that catches people’s attention and gets them to nod their heads is a one who tends to be rewarded.
Great ideas explained poorly can go nowhere.
While old or wrong ideas tell compellingly, can ignite a revolution.
Warden Freeman can narrate a grocery list and bring people to tears while an inarticulate scientist might cure disease and go unnoticed.
There’s too much information in the world for everyone to calmly sift through data, looking for the most rational or the most correct answer.
People are busy and they’re emotional and a good story is always more powerful and persuasive than ice cold statistics.
If you have the right answer, you may or may not get ahead.
If you have the wrong answer but you’re a good storyteller, you’ll probably get ahead, at least for a while.
If you have the right answer and you’re a good storyteller, you’ll almost certainly get ahead.
That has always been true.
It always will be true and shows up in so many areas of history.
Number two, a lot of things do not compute.
Lots of things don’t make any sense.
The numbers don’t add up, the explanations are full of holes, and yet they keep happening.
People make crazy decisions and reacting in bizarre ways seem to defy rational thinking.
Most decisions are not made on a spreadsheet, where you just add up the numbers and a rational answer pops out.
There’s a human element that’s hard to quantify and explain and can seem totally detached from the original goal, yet carries more influence than anything else.
Historian Will Durant once said, quote, logic is an invention of man and be ignored by the universe.
And it often is, which can drive you mad if you expect a world to work in rational ways.
Attempting to distill emotional and hormonal humans into a math equation is a cause of so much frustration and surprise in the world.
Number three, expectations and reality.
Your happiness depends on your expectations more than anything else, so in a world that tends to get better for most people, most of the time, an important life skill is getting the goalpost to stop moving.
It’s also one of the hardest.
A very common plot of history goes like this.
Things get better, wealth increases, technology brings new efficiencies and medicine saves lives, the quality of life goes up.
But people’s expectations rise by just as much, if not more, because those improvements also benefit other people around you, whose circumstances you anchor to yourself to.
So happiness is little change despite the world improving.
It’s been like this forever.
Matysky wrote 275 years ago that quote, if you only wish to be happy, this could be easily accomplished.
But we wish to be happier than other people.
And this is always difficult for we believe others to be happier than they are.
Joddy Rockefeller never had penicillin, he never had sunscreen, he never had adville, but you cannot say that a low-income American with adville and sunscreen today should feel better off than Rockefeller, because that’s not how people’s heads work.
People gauge their well-being relative to those around them, and luxuries become necessities in a remarkably short period of time when the people around you become better off as well.
Charlie Munger once noted that the world is not driven by greed, it’s driven by envy.
Number four, calm plants the seeds of crazy.
There’s a very common cycle of greed and fear, and it goes like this.
Next you assume that good news is permanent.
Then you become oblivious to bad news.
Then you ignore bad news.
Then you deny bad news.
Then you panic at bad news.
Then you accept bad news.
Then you assume bad news is permanent.
Then you ignore good news.
Then you deny good news.
Then you accept good news.
Then you assume good news is permanent.
And then we’re back where we began.
The cycle repeats.
And that’s kind of the life cycle of greed and fear.
It’s always been the case, and it always will be.
That comp plants the seeds of crazy, and good news plants the seeds of bad news.
The 1960s were a period of scientific optimism.
In the previous 50 years the world had gone from horse and buggy to a man on the moon, and from blood-letting to organ transplants.
This caused a big push among economists to try to eradicate the scourge of recessions.
If we could launch inter-colonel ballistic missiles and walk on the moon, then surely we could prevent two quarters of negative GDP growth.
That was the thought at the time.
Simon Minsky, who spent most of his career as an economist at Washington University in St.
Louis, was fascinated by the boom and bust nature of economies.
He also thought that the idea of eradicating recessions, as others were trying to do, was nonsense, and it always would be.
Minsky’s seminal theory was called the financial instability hypothesis.
The idea is not heavy on math and formulas.
It really just describes a psychological process that basically goes like this.
When an economy is stable, people get optimistic.
When they get optimistic, they go into debt.
When they go into debt, the economy becomes unstable.
Simon Minsky’s big idea was that stability is destabilizing.
Calm plants the seeds of crazy.
A lack of recessions actually plants the seeds of the next recession, which is why we can never get rid of them.
Just imagine a world where the stock market never went down.
Let’s imagine a world where market stability is all but assured and stocks only go up.
What would you do in that world?
Well, you would buy as many stocks as you possibly could.
You would mortgage your house and buy more.
You would consider selling a kidney to buy even more.
That would be the reasonable thing to do in a world where stocks never went down.
In the process, the price of stocks would go up because you and your neighbor and everyone else is buying them.
Their valuations would become even more expensive.
They would eventually get so expensive that their future return prospects would decline close to zero.
At that very moment, the seeds of breakdown would start to sprout.
With asset prices pushed high and no room for error, markets would be hanging on by a thread crushed at the first sniff of anything less than perfection.
So the irony is that when markets are guaranteed not to crash or more realistically, when people think that’s the case, they are far more likely to actually crash.
The mere idea of stability causes smart and rational people to move towards bidding asset prices up high enough to cause instability.
So stability is destabilizing or to put it another way, calm plants the seeds of crazy.
Always has and always will.
Number five, when the magic happens.
Necessity is the mother of invention.
And a constant truth that you see throughout history is that the biggest changes and the most important innovations don’t happen when everybody is happy and things are going well.
They tend to occur during or after a terrible event.
That’s when people are a little bit panicked and shocked and worried and when the consequences of not acting quickly are too painful to bear.
So many of the greatest technologies that we enjoy today came directly from or were heavily influenced by the military.
Jets, rockets, microprocessors, microwaves, nuclear energy, even something like penicillin, all of those things have their roots in the military, particularly this period around World War II.
And so then you should ask, are militaries home to the greatest technical visionaries or the most talented engineers?
And maybe they are and it’s not to diminish any of their talent.
But more importantly, militaries are home to really big problems that need to be solved right now.
I think that is why there are so much innovation that comes out of the military.
Innovation is driven by incentives and incentives come in many forms.
On one hand there is, if I don’t figure this problem out, I might get fired from my job.
That incentive will get your brain into gear.
On level higher there is, if I figure this problem out, I might help people and I might make a lot of money.
That will produce sparks of innovation.
Then there’s what militaries have to deal with.
Which is saying, if we don’t figure this out right now, we’re all going to die and Adolf Hitler might take over the world.
That kind of incentive will fuel the most incredible problem solving and innovation in the shortest period of time that the world has ever seen.
And it’s always like that in a panic.
In a recession or a depression or a bear market.
In business, managers looking at their employees and saying, go try something new.
Just blow up the playbook.
I don’t care.
That’s not something that tends to get said when the economy is booming in the outlook is bright.
Big fast changes only happen when they are forced by necessity.
World War II began on horseback in 1939 and it ended with nuclear fission in 1945.
NASA was created in 1958 two weeks after the Soviet launch sputnik and it landed on the moon just 11 years later.
Big innovations that occur that quickly rarely happen without fear as a motivator.
That’s all I’m going to give you for now.
I hope you enjoy the book.
Let me know what you think of it.
Thanks again for listening.