I first came across Farnam Street about four years ago and it has consistently been one of the best sources of learning I have found on the internet.
The site is a passion project headed up by Shane Parrish and he synthesizes a bunch of worldly wisdom from books, talks, and very smart people.
The foundation for Farnam Street is Charlie Munger, known to be an extremely profound thinker. Even the name, Farnam Street, is where Berkshire Hathaway’s headquarters in Omaha is located. If that sounds familiar it’s because Charlie Munger is the right-hand man to Warren Buffett, arguably history’s best investor.
Mr. Munger is a huge proponent of mental models, or a way of seeing the world that helps you make optimal decisions. Farnam Street is an exploration of these mental models and “mastering the best of what other people have figured out.”
It is clear Shane has poured his life and soul in Farnam Street and so I wanted to collect portions of the best learnings I have taken away over the years so that others could enjoy them as well. To be clear, this list is not exhaustive, though not far from it. And the articles are listed in no particular order.
- WARNING: THIS IS GOING TO BE ABSURDLY LONG*
(you don’t need to finish this in one sitting. in fact, it’s probably better if not)
Without further ado, after reading hundreds and hundreds of articles, I present to you…
The Best Quotes from the Best FS Articles
Type of Decisions
- Irreversible and inconsequential
- Good training ground
2. Irreversible and consequential
- Spend time focusing
3. Reversible and inconsequential
4. Reversible and consequential
- Gather evidence
“generalization is a widespread human bias, which means a lot of our understanding of the world actually is based on extrapolations made from relatively small sample sizes.”
To achieve anything we need a view of both the micro and the macro, the forest and the trees — and how both perspectives slot together.
Reflection, however, is an example of an approach I call first-order negative, second-order positive. It’s got very visible short-term costs — it takes time and honest self-assessment about our shortcomings — but pays off in spades in the future. The problem is that the future is not visible today, so slowing down today to go faster at some future point seems like a bad idea to many. Plus with the payoff being so far in the future, it’s hard to connect to the reflection today.
It’s easy to focus on other people; it’s much harder to look inward and face complex challenges.
Incredibly successful people focus their time on just a few priorities and obsess over doing things right. This is simple but not easy.
Pain is something we all try to avoid, both instinctively and consciously. But if you want to do amazing things in life, you need to change your relationship with pain
The easy path means being the same person you were yesterday. It’s easy and comfortable to convince yourself that the world should work differently than it does, that you have nothing to learn from the pain. The harder path is to embrace the pain and ask yourself what you could have done differently or better or what your blind spot was. It’s harder because you stop living in the bubble of your own creation and start living in reality.
There are three important aspects of probability that we need to explain so you can integrate them into your thinking to get into the ballpark and improve your chances of catching the ball:
- Bayesian thinking
Consider the headline “Violent Stabbings on the Rise.” Without Bayesian thinking, you might become genuinely afraid because your chances of being a victim of assault or murder is higher than it was a few months ago. But a Bayesian approach will have you putting this information into the context of what you already know about violent crime.
2. Fat-tailed curves
You’ll never meet a man who is ten times the size of an average man. But in a curve with fat tails, like wealth, the central tendency does not work the same way. You may regularly meet people who are ten, 100, or 10,000 times wealthier than the average person. That is a very different type of world.
Far more probability estimates are wrong on the “over-optimistic” side than the “under-optimistic” side. You’ll rarely read about an investor who aimed for 25% annual return rates who subsequently earned 40% over a long period of time.
As machines become more powerful, the people who benefit will be the people who are “adept at working with computers and with related devices for communications and information processing.” The way to earn well will be to augment the value of tech, even if only by a small bit.
The important point to note about the Pygmalion effect is that it creates a literal change in what occurs. There is nothing mystical about the effect. When we expect someone to perform well in any capacity, we treat them in a different way.
- First Principles *(would suggest reading in totality)
The difference between reasoning by first principles and reasoning by analogy is like the difference between being a chef and being a cook. If the cook lost the recipe, he’d be screwed. The chef, on the other hand, understands the flavor profiles and combinations at such a fundamental level that he doesn’t even use a recipe. He has real knowledge as opposed to know-how.
Rockets are absurdly expensive, which is a problem because Musk wants to send people to Mars. And to send people to Mars, you need cheaper rockets. So he asked himself, “What is a rocket made of? Aerospace-grade aluminum alloys, plus some titanium, copper, and carbon fiber. And … what is the value of those materials on the commodity market? It turned out that the materials cost of a rocket was around two percent of the typical price.”
Why, then, is it so expensive to get a rocket into space? Musk, a notorious self-learner with degrees in both economics and physics, literally taught himself rocket science. He figured that the only reason getting a rocket into space is so expensive is that people are stuck in a mindset that doesn’t hold up to first principles. With that, Musk decided to create SpaceX and see if he could build rockets himself from the ground up.
The math may be complicated, but the principle isn’t. Your chances of ending up with what you want — say, the guy with the amazing smile or that lab director job in California — dramatically increase if you make the first move. Fry says, “aim high, and aim frequently. The math says so.”
Cognitive inertia is the reason that changing our habits can be difficult. The default is always the path of least resistance, which is easy to accept and harder to question.
The important thing about inertia is that it is only the initial push that is difficult. After that, progress tends to be smoother.
Velocity and speed are different things. Speed is the distance traveled over time. I can run around in circles with a lot of speed and cover several miles that way, but I’m not getting anywhere. Velocity measures displacement. It’s direction-aware.
Many of us have seen the ironic (in hindsight) doctor-endorsed cigarette ads from the past. A glance at a newspaper will doubtless reveal that meat or butter or sugar has gone from deadly to saintly, or vice versa. We forget that laughable, erroneous beliefs people once held are not necessarily any different from those we now hold. The people who believed that the earth was the center of the universe, or that some animals appeared out of nowhere or that the earth was flat, were not stupid. They just believed facts that have since decayed.
“…two of the most important forms of intelligence: the ability to read other people, and the ability to understand oneself. Those are the two kinds of intelligence that you need to succeed at chess — and in life.” — Pandolfini
- Giving away the product makes it less desirable.
- Too many options necessitate selection, and hence frustration, when brain decides it’s unnecessary work.
- Admitting negatives up-front might lead to better communication.
- Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments
“Ignorance more frequently begets confidence than does knowledge.”
When contemplating the purchase of a $25 pen, the majority of subjects would drive to another store 15 minutes away to save $7. When contemplating the purchase of a $455 suit, the majority of subjects would not drive to another store 15 minutes away to save $7. The amount saved and time involved are the same, but people make very different choices. Watch out for relative thinking; it comes naturally to all of us.
There are three fundamental quirks of human nature. We fall in love with what we already have. We focus on what we might lose, rather than what we might gain. We assume that other people will see the transaction from the same perspective as we do.
Power of Price
When told that the drug cost $2.50 per dose, nearly all of the subjects reported pain relief. When told that the drug cost $0.10 per dose, only half of the subjects reported pain relief.
When we feel uncertain, we all tend to look to others for answers as to how we should behave, what we should think and what we should do.
Version 4: A fourth Prince that other students uncover is the most interesting one, in Badaracco’s mind. Students find that the book reveals a kind of worldview, he says, and it’s not an evil worldview. This version goes: “If you’re going to make progress in the world you’ve got to have a clear sense, a realistic sense, an unsentimental sense, of how things really work: the mixed motives that compel some people and the high motives that compel some others. And the low motives that unfortunately captivate other people.”
Students who claim the fourth Prince, he said, believe that if they’re going to make a difference, it’s got to be in that world, “not in some ideal world that you would really like to live in.”
Take also sub-prime mortgage lending practices in the lead up to the 2008 financial crisis. If two banks are competing for borrowers and one lets their standards slide to zero (or less), which is likely to prevail? Even if the practice is a “long-term loser,” it can still take hold in systems where short-term incentives provide encouragement to the actual decision makers.
Applying pressure over the entire ice surface requires a lot of work but very little actual skill. In hockey, much like basketball, teams often concede a large percentage of the playing surface before trying to stop the other team. This favors the skilled teams over the unskilled teams. Applying relentless pressure over the entire playing surface, like the Swiss, neutralized the skill advantage of their superior opponent.
Watch chef Gordon Ramsay’s Kitchen Nightmares and you’ll see a pattern. The menus at failing restaurants offer too many dishes. The owners think making every dish under the sun will broaden the appeal of the restaurant. Instead it makes for a crappy food (and creates inventory headaches).
That’s why Ramsay’s first step is nearly always to trim the menu, usually from thirty-plus dishes to around ten. Think about that. Improving the current menu doesn’t come first. Trimming it down comes first. Then he polishes what’s left.
- Things that have never happened before are bound to occur with some regularity.
- The latest trade of a security creates a dangerous illusion that its market price approximates its true value. This mirage is especially dangerous during periods of market exuberance.
share something personal, and show the audience that you are talking to them, not simply giving a canned speech or sales pitch. if you think about it, this is exactly what the classic comedy act opening does.
When people who have a high need for achievement–and that includes all Harvard Business School graduates–have an extra half hour of time or an extra ounce of energy, they’ll unconsciously allocate it to activities that yield the most tangible accomplishments.
- From Clayton Christensen
Competing by eliminating our differences seems like nothing more than an expensive route to commoditization.
The best performers observe themselves closely. They are in effect able to step outside themselves, monitor what is happening in their own minds, and ask how it’s going. Researchers call this metacognition — knowledge about your own knowledge, thinking about your own thinking. Top performers do this much more systematically than others do; it’s an established part of their routine.
Average performers believe their errors were caused by factors outside their control: My opponent got lucky; the task was too hard; I just don’t have the natural ability for this. Top performers, by contrast, believe they are responsible for their errors.
- From Talent is Overrated
You are going on a blind date. You’ve been told all sorts of good things in advance — the person is attractive and funny and has a good job — so of course, you are excited. The date starts off great, living up to expectations. Halfway through you find out they have a cat. You hate cats. Given how well everything else is going, how much should this information affect your decision to keep dating?
Quantify your belief in the most probable outcome with a bet. How much would you wager that harmony on the pet issue is an accurate predictor of relationship success? Ten cents? Ten thousand dollars? Do the thought experiment. Imagine walking into a casino and placing a bet on the likelihood that this person’s having a cat will ultimately destroy the relationship. How much money would you take out of your savings and lay on the table? Your answer will give you an idea of how much to factor the cat into your decision-making process. If you wouldn’t part with a dime, then I wouldn’t worry about it.
Everything comes down to payoffs. A horse with a 50% chance of winning might be a good bet, but it depends on the payoff. The same holds for a 100-to-1 longshot. It’s not the frequency of winning but the magnitude of the win that matters.
Complexity bias is interesting because the majority of cognitive biases occur in order to save mental energy. For example, confirmation bias enables us to avoid the effort associated with updating our beliefs. We stick to our existing opinions and ignore information that contradicts them. Availability bias is a means of avoiding the effort of considering everything we know about a topic. It may seem like the opposite is true, but complexity bias is, in fact, another cognitive shortcut. By opting for impenetrable solutions, we sidestep the need to understand.
Amateurs believe that the world should work the way they want it to. Professionals realize that they have to work with the world as they find it. Amateurs are scared — scared to be vulnerable and honest with themselves. Professionals feel like they are capable of handling almost anything.
To get the most out of each book we read it is vital to have a plan for recording, reflecting on, and putting into action the conclusions we draw from the information we consume.
Most people think that consuming information is the same as learning information. No idea could be further from the truth.
The basic process of learning consists of reflection and feedback.
- Choose a Concept
- Teach it to a Toddler
- Identify Gaps and Go Back to The Source Material
- Review and Simplify (optional)
The rate at which you learn and progress in the world depends on how willing you are to weigh the merit of new ideas, even if you don’t instinctively like them.
Open-minded people see disagreement as a thoughtful means to expand their knowledge.
Nothing will change your future trajectory like habits.
While goals rely on extrinsic motivation, habits are automatic. They literally rewire our brains.
When seeking to attain something in our lives, we would do well to invest our time in forming positive habits, rather than concentrating on a specific goal.
Law 229: If a builder builds a house for a man and does not make its construction firm, and the house which he has built collapses and causes the death of the owner of the house, that builder shall be put to death.
When you align incentives of everyone in both positive and negative ways, you create a system that takes care of itself. Taleb describes Law 229 of Hammurabi’s Code as “the best risk-management rule ever.”
The butterfly effect is the idea that small things can have non-linear impacts on a complex system.
We like to think we can predict the future and exercise a degree of control over powerful systems such as the weather and the economy. Yet the butterfly effect shows that we cannot.
One big mistake I see people make over and over is focusing on proving themselves right, instead of focusing on achieving the best outcome.
People who are working to prove themselves right will work hard finding evidence for why they’re right. They’ll go to the ends of the earth to disagree with someone who has another idea. Everything becomes about their being right.
The most important lesson I’ve learned from running a company is that the more I give up trying to be right, the better the outcomes get for everyone.
“You may not control all the events that happen to you, but you can decide not to be reduced by them. Try to be a rainbow in someone else’s cloud. Do not complain. Make every effort to change things you do not like. If you cannot make a change, change the way you have been thinking. You might find a new solution.” — Maya Angelou
Maya Angelou’s words remind us that there is power in reflection. It is how we learn from our experiences, widening our perspectives to appreciate that life has all manner of ebbs and flows. Indeed, I would argue that we cannot learn without reflection.
our brain has two general modes of thinking — ‘focused’ and ‘diffuse’ — and both of these are valuable and required in the learning process.
The focused mode is what we traditionally associate with learning. Read, dive deep, absorb.
Diffuse-mode thinking is what happens when you relax your attention and just let your mind wander. This relaxation can allow different areas of the brain to hook up and return valuable insights. … Diffuse-mode insights often flow from preliminary thinking that’s been done in the focused mode.
Should we become specialists or polymaths? Is there a balance we should pursue?
When their particular skills are in demand, specialists experience substantial upsides.
The downside is that specialists are vulnerable to change.
A generalizing specialist has a core competency which they know a lot about. At the same time, they are always learning and have a working knowledge of other areas.
If we see someone throwing money away, we call that person crazy. This bothers us, in part, because money has value. Wasting it seems nuts. And yet we see others — and ourselves — throw away something far more valuable every day: Time.
Monotony collapses time; novelty unfolds it. You can exercise daily and eat healthy and live a long life, while experiencing a short one. If you spend your life sitting in a cubicle and passing papers, one day is bound to blend unmemorably into the next — and disappear. That’s why it’s important to change routines regularly, and take vacations to exotic locales, and have as many new experiences as possible that can serve to anchor our memories. Creating new memories stretches out psychological time, and lengthens our perception of our lives.
We shall never have more time. We have, and have always had, all the time there is.
Pang argues that a four hour “creative work day” is optimal for producing.
While we work 8 or more hours a day, most of that is just busywork. Effectiveness and total hours worked are two different things. Learn what moves the needle and focus your work efforts on that, ignoring or getting rid of busywork.
When you walk for a long time, there comes a moment when you no longer know how many hours have passed, or how many more will be needed to get there; you feel on your shoulders the weight of the bare necessities, you tell yourself that’s quite enough — that really nothing more is needed to keep body and soul together — and you feel you could carry on like this for days, for centuries. You can hardly remember where you are going or why; that is as meaningless as your history, or what the time is. And you feel free, because whenever you remember the former signs of your commitments in hell — name, age, profession, CV — it all seems absolutely derisory, minuscule, insubstantial.
Solitude is an important aspect toward accomplishing great things, creative or otherwise. In fact, it’s one of the commonalities found amongst the routines of great writers and artists.
That’s not to say that if you lock yourself in a room, you’re going to turn into something great. It does suggest, however, that there is something to being alone with your thoughts.
Shyness is the fear of social disapproval or humiliation, while introversion is a preference for environments that are not overstimulating. Shyness is inherently painful; introversion is not.
A well-known study out of UC Berkeley by organizational behavior professor Philip Tetlock found that television pundits — that is, people who earn their livings by holding forth confidently on the basis of limited information — make worse predictions about political and economic trends than they would by random chance. And the very worst prognosticators tend to be the most famous and the most confident — the very ones who would be considered natural leaders in an HBS classroom.
The U.S. Army has a name for a similar phenomenon: “the Bus to Abilene.” “Any army officer can tell you what that means,” Colonel (Ret.) Stephen J. Gerras, a professor of behavioral sciences at the U.S. Army War College, told Yale Alumni Magazine in 2008. “It’s about a family sitting on a porch in Texas on a hot summer day, and somebody says, ‘I’m bored. Why don’t we go to Abilene?’ When they get to Abilene, somebody says, ‘You know, I didn’t really want to go.’ And the next person says, ‘I didn’t want to go — I thought you wanted to go,’ and so on. Whenever you’re in an army group and somebody says, ‘I think we’re all getting on the bus to Abilene here,’ that is a red flag. You can stop a conversation with it. It is a very powerful artifact of our culture.”
The “Bus to Abilene” anecdote reveals our tendency to follow those who initiate action — any action.
If you assume that the average person spends 3–4 hours a day watching TV, an hour or more commuting, and another 2–3 hours a week shopping, that’s 28 hours a week on the low end.
Twenty-eight hours. That’s 1,680 minutes. That’s huge. If you read a page a minute, that’s more than 1,600 pages a week.
Charlie Munger, voracious reader, billionaire, and vice chairman of Berkshire Hathaway, once commented: “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero.”
- I love this
Warning: Side effects of reading more may include (1) increased intelligence; (2) an uncomfortable silence when someone asks you what happened on Game of Thrones last night and you say “Game of what?”; (3) better ideas; and (4) increased understanding of yourself and others.
When you schedule things, you are forced to deal with the fact that there are only so many hours in a week. You’re forced to make choices rather than add something to a never ending to-do list that only becomes a source of anxiety.
Scheduling things also creates a visual feedback mechanism for how you actually spend your time — something we’re intentionally blind to because we won’t like what we see.
People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.”
“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”
- Charles Darwin
The marriage with our self is the most difficult. It’s “connected to the great questions of life that refuse to go away.” In our world of non-stop busyness, the cracks of silence that open can reveal an unfamiliar character. Developing this inner relationship, “we see not only the truth of our present circumstances and a way forward but we also realize how short our stay is on this earth.”
“What the pupil must learn, if he learns anything at all, is that the world will do most of the work for you, provided you cooperate with it by identifying how it really works and aligning with those realities. If we do not let the world teach us, it teaches us a lesson.”
- Joseph Tussman
And just as one spoils the stomach by overfeeding and thereby impairs the whole body, so can one overload and choke the mind by giving it too much nourishment. For the more one reads the fewer are the traces left of what one has read; the mind is like a tablet that has been written over and over. Hence it is impossible to reflect; and it is only by reflection that one can assimilate what one has read if one reads straight ahead without pondering over it later, what has been read does not take root, but is for the most part lost.
- Arthur Schopenhauer
One of my favorite questions to probe thinking is to ask what information would cause someone to change their mind. Immediately stop listening and leave if they say ‘I can’t think of anything.
You should also probe yourself. Try and understand if you’re talking about something you really know something about or if you’re just regurgitating some talking head you heard on the news last night. Your life will become instantly better and your mind clearer if you simply stop the latter.
If you keep learning all the time, you have a wonderful advantage.
- Charlie Munger
Where should we devote our limited time in life, in order to achieve the most success?
You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you’re going to lose. And that’s as close to certain as any prediction that you can make. You have to figure out where you’ve got an edge. And you’ve got to play within your own circle of competence.
- Charlie Munger
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.
You have to apply yourself each day to becoming a little better. By applying yourself to the task of becoming a little better each and every day over a period of time, you will become a lot better.
…identify the tasks or knowledge that are just out of your reach, strive to upgrade your performance, monitor your progress, and revise accordingly.
We think the more information we consume the more signal we’ll consume. Only the mind doesn’t work like that. When the volume of information increases, our ability to comprehend the relevant from the irrelevant becomes compromised. We place too much emphasis on irrelevant data and lose sight of what’s really important.
Multitasking, in short, is not only not thinking, it impairs your ability to think. Thinking means concentrating on one thing long enough to develop an idea about it.
“Most geniuses — especially those who lead others — prosper not by deconstructing intricate complexities but by exploiting unrecognized simplicities.”
- Andy Benoit
We tend to either dismiss new evidence, or embrace it as though nothing else matters. Bayesians try to weigh both the old hypothesis and the new evidence in a sensible way.
The retrievability and ease of recall biases indicate that the availability bias can substantially and unconsciously influence our judgment. We too easily assume that our recollections are representative and true and discount events that are outside of our immediate memory.
One of the reasons reciprocation can be used so effectively as a device for gaining another’s compliance is that it combines power and subtlety. Especially in its concessionary form, the reciprocation rule often produces a yes response to a request that otherwise would surely have been refused.
I hope that the next time you come across a situation where you feel the need to return a favor, you will think twice about the possible consequences of accepting it in the first place. You may think, for example, that someone offering you a free pen will not influence you at all, but there is an entire human history arguing otherwise.
Genghis Khan was not born a genius. Instead, as one biographer put it, his was “a persistent cycle of pragmatic learning, experimental adaptation, and constant revision driven by his uniquely disciplined and focused will.”
He was the greatest conqueror the world ever knew because he was more open to learning than any other conqueror has ever been.
each victory and advancement that made Khan smarter also bumped him against new situations he’d never encountered before. It takes a special kind of humility to grasp that you know less, even as you know and grasp more and more. It’s remembering Socrates’ wisdom lay in the fact that he knew that he knew next to nothing.
Do you know how you can tell when someone is truly humble? I believe there’s one simple test: because they consistently observe and listen, the humble improve. They don’t assume, ‘I know the way.
The solution is as straightforward as it is initially uncomfortable: Pick up a book on a topic you know next to nothing about. Put yourself in rooms where you’re the least knowledgeable person. That uncomfortable feeling, that defensiveness that you feel when your most deeply held assumptions are challenged — what about subjecting yourself to it deliberately? Change your mind. Change your surroundings.
If people tell you what you really don’t want to hear — what’s unpleasant — there’s an almost automatic reaction of antipathy. You have to train yourself out of it. It isn’t foredestined that you have to be this way. But you will tend to be this way if you don’t think about it.
- Charlie Munger
We only give a couple of instructions to people when they go to work for us: One is to think like an owner. And the second is to tell us bad news immediately — because good news takes care of itself. We can take bad news, but we don’t like it late.
- Warren Buffett
You can learn not to want what you want, to recognize desires but not be controlled by them. This does not mean that you lie down on the road and invite everybody to walk all over you. It means that you continue to live a very normal-looking life, but live from a whole new viewpoint. You do the things that a person must do, but you are free from that obsessive, compulsive drivenness of your own desires.
Contrary to our expectations, the universe does not keep accounting of a random process so streaks are not necessarily tilted towards the true proportion. Your chance of getting a red after a series of blacks will always be equal to that of getting another red as long as the wheel is fair.
One of the easiest ways to increase your value to an organization is to reduce the friction required to get you to do your job. You don’t need to learn any new skills for this; you just have to shift your perspective to your boss’s point of view and see how hard it is for them to get you to do something.
When contemplating a moral action, imagine that you do not know if you will be the moral doer or receiver, and when in doubt err on the side of the other person.”
- Michael Shermer
The heart and soul of the integrity of the system is that all the packages have to be shifted rapidly in one central location each night. And the system has no integrity if the whole shift can’t be done fast. And Federal Express had one hell of a time getting the thing to work. And they tried moral suasion, they tried everything in the world, and finally somebody got the happy thought that they were paying the night shift by the hour, and that maybe if they paid them by the shift, the system would work better. And lo and behold, that solution worked.
- Charlie Munger
Suspending problematic children from school worsens their behavior, as they are more likely to engage in criminal behavior when outside school.
Damage-control lawsuits can lead to negative media attention and cause more harm (as occurred in the notorious McLibel case).
Banning alcohol has, time and time again, led to higher consumption and the formation of criminal gangs, resulting in violent deaths.
Abstinence-based education invariably causes a rise in teenage pregnancies.
Many people who experience a rodent infestation will stop feeding their cats, assuming that this will encourage them to hunt more. The opposite occurs: well-fed cats are better hunters than hungry ones.
When the British government offered financial rewards for people who killed and turned in cobras in India, people, reacting to incentives, began breeding the snakes. Once the reward program was scrapped, the population of cobras in India rose as people released the ones they had raised. The same thing occurred in Vietnam with rats.
Despite our best intentions, thinking forward increases the odds that you’ll cause harm. Thinking backward, call it subtractive avoidance or inversion, is less likely to cause harm.
Iatrogenics: Why Intervention Often Leads to Worse Outcomes
A simple rule for the decision maker is that intervention needs to prove its benefits and those benefits need to be orders of magnitude higher than the natural (that is non-interventionist) path.
“You’re not entitled to take a view, unless and until you can argue better against that view than the smartest guy who holds that opposite view. If you can argue better than the smartest person who holds the opposite view, that is when you are entitled to hold a certain view.”
- Charlie Munger
If you make your bed every morning you will have accomplished the first task of the day. It will give you a small sense of pride and it will encourage you to do another task and another and another.
By the end of the day, that one task completed will have turned into many tasks completed. Making your bed will also reinforce the fact that little things in life matter.
Every event had standards — times you had to meet. If you failed to meet those standards your name was posted on a list and at the end of the day those on the list were invited to — a “circus.”
But an interesting thing happened to those who were constantly on the list. Over time those students- — who did two hours of extra calisthenics — got stronger and stronger.
But if you want to change the world, don’t be afraid of the circuses.
It is on Wednesday of Hell Week that you paddle down to the mud flats and spend the next 15 hours trying to survive the freezing cold mud, the howling wind and the incessant pressure to quit from the instructors.
As the sun began to set that Wednesday evening, my training class, having committed some “egregious infraction of the rules” was ordered into the mud.
The mud consumed each man till there was nothing visible but our heads. The instructors told us we could leave the mud if only five men would quit — just five men and we could get out of the oppressive cold.
Looking around the mud flat it was apparent that some students were about to give up. It was still over eight hours till the sun came up — eight more hours of bone chilling cold.
The chattering teeth and shivering moans of the trainees were so loud it was hard to hear anything and then, one voice began to echo through the night — one voice raised in song.
The song was terribly out of tune, but sung with great enthusiasm.
One voice became two and two became three and before long everyone in the class was singing.
We knew that if one man could rise above the misery then others could as well.
The instructors threatened us with more time in the mud if we kept up the singing — but the singing persisted.
And somehow — the mud seemed a little warmer, the wind a little tamer and the dawn not so far away.
If I have learned anything in my time traveling the world, it is the power of hope. The power of one person — Washington, Lincoln, King, Mandela and even a young girl from Pakistan — Malala — one person can change the world by giving people hope.
So, if you want to change the world, start singing when you’re up to your neck in mud.
1. At the end of each chapter write a few bullet points that summarize what you’ve read and make it personal if you can — that is, apply it to something in your life. Also note any unanswered questions. When you’re done the book, put it down for a week.
2. Pick up the book again and go through all your notes. Most of these will be garbage but there will be lots you want to remember. Write the good stuff on the inside cover of the book along with a page number.
3. Copy out the excerpts by hand or take a picture of them to pop into Evernote. Tag accordingly.
1. Gather raw material.
2. Mental Digestive Process
3. Unconscious Processing
5. Final Stage (Application)
Adults are starved for a kind word. When you understand the power of honest praise (as opposed to bullshitting, flattery, and sucking up), you realize that withholding it borders on immoral. If you see something that impresses you, a decent respect to humanity insists you voice your praise.
[O]ne should have a system instead of a goal. The system-versus-goals model can be applied to most human endeavours. In the world of dieting, losing twenty pounds is a goal, but eating right is a system. In the exercise realm, running a marathon in under four hours is a goal, but exercising daily is a system. In business, making a million dollars is a goal, but being a serial entrepreneur is a system.
- Scott Adams
Your assumptions about the lives of others are in direct relation to your naïve pomposity. Many people you believe to be rich are not rich. Many people you think have it easy worked hard for what they got. Many people who seem to be gliding right along have suffered and are suffering. Many people who appear to you to be old and stupidly saddled down with kids and cars and houses were once every bit as hip and pompous as you.
We are honest-to-god autonomous,” says Hamilton Lott, general manager of our Vulcraft Division in Florence, South Carolina. “That means we duplicate efforts made in other parts of Nucor. The company might develop the same computer program six times. But, the advantages of local autonomy are so great, we think it’s worth it.”
Remove Unnecessary Hierarchy
Our executives get the same group insurance, same holidays, and same vacations as everybody else. They eat lunch in the same cafeterias. They fly economy class on regular commercial flights (although we do allow the use of frequent flyer upgrades). We have no executive suites and no executive cars. At headquarters, our “corporate dining room” is the deli across the street.
What is a bad strategy?
Bad strategy is long on goals and short on policy or action. It assumes that goals are all you need. It puts forward strategic objectives that are incoherent and, sometimes, totally impracticable. It uses high-sounding words and phrases to hide these failings.
What is a good strategy?
Good strategy is not just “what” you are trying to do. It is also “why” and “how” you are doing it. … Good strategy requires leaders who are willing and able to say no to a wide variety of actions and interests. Strategy is at least as much about what an organization does not do as it is about what it does.
Four ways to increase value:
In particular, increasing value requires a strategy for progress on at least one of four different fronts: deepening advantages, broadening the extent of advantages, creating higher demand for advantaged products or services, or strengthening the isolating mechanisms that block easy replication and imitation by competitors.
from a leader’s perspective, it’s more important to have the right systems with the right incentives in place, rather than trying to be fair to one person — even if that person is the leader or someone close to the leader.
[Conversational Narcissism] is pervasive and rooted in our culture of individualism…The most frequently used written word in the language is ‘the’, but the most frequently spoken word..is ‘I.’
Passive conversational narcissism entails neglect of supportive questions at all such discretionary points and extremely sparse use of them throughout conversation. Listening behaviour takes place but is passive. There is little attempt to draw others out or assume other forms of active listening.
For example, someone might ask: Why did I lose my job?
Proximate cause: the company was experiencing financial difficulties and could not continue to pay all its employees.
Root cause: I was not of particular value to the company and they could survive easily without me.
Among competing hypotheses, the one with the fewest assumptions should be selected.
‘Never attribute to malice that which can be adequately explained by neglect.’
The human understanding when it has once adopted an opinion draws all things else to support and agree with it. And though there be a greater number and weight of instances to be found on the other side, yet these it either neglects and despises, or else by some distinction sets aside and rejects, in order that by this great and pernicious predetermination the authority of its former conclusions may remain inviolate.
The book recommends a few simple steps you can take to increase your power:
1. be visible;
2. emphasize the aspects you’re good at;
3. make those in power feel good about themselves;
4. if you must point out a mistake by someone in power, blame the situation or others; and
5. shower those above with flattery.
“Creativity is just connecting things. When you ask creative people how they did something, they feel a little guilty because they didn’t really do it, they just saw something. It seemed obvious to them after a while.”
If to petrify is success, all one has to do is to humor the lazy side of the mind; but if to grow is success, then one must wake up anew every morning and keep awake all day. I saw great businesses become but the ghost of a name because someone thought they could be managed just as they were always managed, and though the management may have been most excellent in its day, its excellence consisted in its alertness to its day, and not in slavish following of its yesterdays. Life, as I see it, is not a location, but a journey. Even the man who most feels himself ‘settled’ is not settled — he is probably sagging back. Everything is in flux, and was meant to be. Life flows. We may live at the same number of the street, but it is never the same man who lives there.
It could almost be written down as a formula that when a man begins to think that he at last has found his method, he had better begin a most searching examination of himself to see whether some part of his brain has not gone to sleep.
Moving into a new technology almost always appears to be less efficient than staying with the present technology because of the need to bring the new technology up to speed. The cost of progress of an established technology is compared with that of one in its infancy, even though it may eventually cost much less to bring the new technology up to the state of the art than it did to bring the present one there.
Carol Dweck: A Summary of The Two Mindsets And The Power of Believing That You Can Improve *(I’d suggest reading in entirety)
The passion for stretching yourself and sticking to it, even (or especially) when it’s not going well, is the hallmark of the growth mindset. This is the mindset that allows people to thrive during some of the most challenging times in their lives.
When asked how to get smarter, Buffett once held up stacks of paper and said, “Read 500 pages like this every week. That’s how knowledge builds up, like compound interest.”
Some men learn the value of money by not having any and starting out to pry a few dollars loose from the odd millions that are lying around; and some learn it by having fifty thousand or so left to them and starting out to spend it as if it were fifty thousand a year. Some men learn the value of truth by having to do business with liars; and some by going to Sunday School. Some men learn the cussedness of whiskey by having a drunken father; and some by having a good mother. Some men get an education from other men and newspapers and public libraries; and some get it from professors and parchments — it doesn’t make any special difference how you get a half-nelson on the right thing, just so you get it and freeze on to it.
Remember that anything really worth doing is probably hard work, and will absolutely require you to do things you don’t currently do, which will feel uncomfortable for a while. This is a “hard truth” we must all face. If it was easy, everyone would already be doing it.
My life is not guided by philosophy or theories. I get things done and leave others to extract the principles from my successful solutions. I do not work on a theory. Instead, I ask: what will make this work? If, after a series of solutions, I find that a certain approach worked, then I try to find out what was the principle behind the solution. So Plato, Aristotle, Socrates, I am not guided by them…I am interested in what works…Presented with the difficulty or major problem or an assortment of conflicting facts, I review what alternatives I have if my proposed solution does not work. I choose a solution which offers a higher probability of success, but if it fails, I have some other way. Never a dead end.
In the appreciation phase, we were trying to direct our comments at the person directly: I value you and I value your effort. It has not gone unnoticed.
The advice phase is different — we want to talk about the task. A mentor of mine frequently called this “Separating the issues from the people” or being “Hard on the issues, easy on the people.” Either way, we’re trying to build the person up emotionally while also improving their performance. The key is to be specific.
This inclination to ignore problems is once again a simple manifestation of an unwillingness to delay gratification. Confronting problems is, as I have said, painful. To willingly confront a problem early, before we are forced to confront it by circumstances, means to put aside something pleasant or less painful for something more painful. It is choosing to suffer now in the hope of future gratification rather than choosing to continue present gratification in the hope that future suffering will not be necessary.
There are four [tools]: delaying of gratification, acceptance of responsibility, dedication to truth, and balancing.
That is the way to learn the most, that when you are doing something with such enjoyment that you don’t notice that the time passes.
2. Make mistakes
3. Raise questions
4. Follow the flow of ideas
Before you offer an explanation or defense, just imagine that whatever the other person is saying must be true. That’s radical. But it sure is the fastest way to get new ideas into your brain. That’s peak listening.
Real knowledge comes when people do the work…
On the other hand, we have the people who don’t do the work — they pretend. While they’ve learned to put on a good show, they lack understanding. They can’t answer questions that don’t rely on memorization. They can’t explain things without using jargon or vague terms. They have no idea how things interact. They can’t predict consequences.
The number one thing to understand about influence is that people make decisions for their reasons, not yours.
Do not agree to meetings or calls with no clear agenda or end time.
Tim [Ferriss] says:
If the desired outcome is defined clearly with a stated objective and agenda listing topics/questions to cover, no meeting or call should last more than 30 minutes. Request them in advance so you “can best prepare and make good use of the time together.”
Parkinson’s Law (*so accurate it hurts)
“work expands so as to fill the time available for its completion.”
Get Smart: Three Ways of Thinking to Make Better Decisions and Achieve Results
- Long-Term vs. Short Term
Resolve today to develop long-time perspective. Become intensely future oriented. Think about the future most of the time. Consider the consequences of your decisions and actions. What is likely to happen? And then what could happen? And then what? Practice self-discipline, self-mastery, and self-control. Be willing to pay the price today in order to enjoy the rewards of a better future tomorrow.
2. Slow Thinking
Pause. Think. Act.
This sounds easy but it’s not. One habit you can develop is to continually ask “How do we know this is true?” for the pieces of information you think are relevant to the decision.
3. Informed vs. Uninformed Opinion
Create a hypothesis — a yet-to-be-proven theory. Then seek ways to invalidate this hypothesis, to prove that your idea is wrong. This is what scientists do.
This is exactly the opposite of what most people do. They come up with an idea, and then they seek corroboration and proof that their idea is a good one. They practice “confirmation bias.” They only look for confirmation of the validity of the idea, and they simultaneously reject all input or information that is inconsistent with what they have already decided to believe.
Create a negative or reverse hypothesis. This is the opposite of your initial theory. For example, you are Isaac Newton, and the idea of gravity has just occurred to you. Your initial hypothesis would be that “things fall down.” You then attempt to prove the opposite — “things fall up.”
If you cannot prove the reverse or negative hypothesis of your idea, you can then conclude that your hypothesis is correct.
- Brian Tracy
I have yet to meet a wise person who doesn’t know how to find some joy even in the midst of what is hard, and to smile and laugh easily, including at oneself. A sense of humor is high on my list of virtues, in interplay with humility and compassion and a capacity to change when that is the right thing to do. It’s one of those virtues that softens us for all the others.
What the Most Successful People Do Before Breakfast (*definitely recommend reading all of this)
1. Nurturing their careers — strategizing and focused work
2. Nurturing their relationships — giving their families and friends their best
3. Nurturing themselves — exercise and spiritual and creative practices
10 Techniques for Building Rapport with Anyone (*highly recommend)
6. Suspending your ego is nothing more complex than putting other individuals’ wants, needs, and perceptions of reality ahead of your own. Most times, when two individuals engage in a conversation, each patiently waits for the other person to be done with whatever story he or she is telling. Then, the other person tells his or her own story, usually on a related topic and often times in an attempt to have a better and more interesting story. Individuals practicing good ego suspension would continue to encourage the other individual to talk about his or her story, neglecting their own need to share what they think is a great story.
I had, also, during many years, followed a golden rule, namely, that whenever a published fact, a new observation or thought came across me, which was opposed to my general results, to make a memorandum of it without fail and at once; for I had found by experience that such facts and thoughts were far more apt to escape from memory than favorable ones.
- Charles Darwin
10 Best Podcasts — The Knowledge Project
- Naval Ravikant: One of the most popular podcasts on the site, this conversation is a must-listen.
- Adam Grant: Givers, Takers, and the Resilient Mind
- Ray Dalio: Life Lessons from a Self-Made Billionaire
- Barbara Oakley: Learning How to Learn
- Annie Duke: Getting Better By Being Wrong
- Ben Thompson: Thriving in a Digital World
- Patrick Collison: Earnings Your Stripes
- Tobi Lutke: The Trust Battery
- Ed Latimore: The Warrior Poet
- Tyler Cowen: Thinking About Thinking
Outside Articles on FS
Thank you Shane Parrish for all of your hard work. You are a learning, truth-seeking machine.
On behalf of all FS’ers,
Phew! You made it. You’re incredible! All I ask is that you check out my free site where my goal is to educate people about investing.