Key insights from Morgan Housel‘s 3,000th column “I’m Just Now Realizing How Stupid We Are.” He offered his lessons learned from writing about the economy.
Morgan Housel’s Lessons Learned Writing on the Economy
I’ve learned that changing your mind is one of the most difficult things we do. It is far easier to fool yourself into believing a falsehood than admit a mistake.
The trick is strong opinions–ones you are willing to act upon–lightly held. Decide in advance what events, outcomes, or new data would force you to reconsider your beliefs or current course of action.
I’ve learned that short-term thinking is at the root of most of our problems, whether it’s in business, politics, investing, or work.
I would make a distinction between looking for early impact and not considering the longer term consequences of a decision or action. Also very few “greedy algorithm” approaches–where at each step you pick the largest short term gain–actual work in real life.
I’ve learned that a willingness to wait longer than other people is your biggest natural edge. If you can think about the next five years while everyone else is fixated on the next five months, you have an advantage that makes high-frequency trading, insider tips, and corporate loopholes look like a joke.
This is a part of the last one: you have to have a longer term plan and accept short term setbacks–you have to be able to cross a valley–if you want to have a larger impact or accomplish anything of significance.
I’ve learned that there’s a strong correlation between knowledge and humility.
It’s unfortunate business decision making is biased toward the cocksure and self-confident incompetents. Leadership requires setting your doubts aside to make a decision but worrying that you will appear weak in soliciting feedback on possible courses of action or a tentative conclusion dooms you to ignorance and mediocrity.
I’ve learned that people’s expectations grow faster than their wealth. The country is richer than it’s ever been. I don’t think it’s as happy as it’s ever been.
Too many entrepreneurs think that wealth will solve their problems or make up for other shortcomings. I have watched a lot of people get wealthy, very few were improved by it. If they were unhappy or held back by bad habits wealth enabled them to engage in worse behavior and only pointed out the need for personal transformation.
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