Daniel's notes on Same As Ever

Amazon founder Jeff Bezos once said that he's often asked what's going to change in the next ten years. "I almost never get the ques-tion: What's not going to change in the next ten years?" he said. "And I submit to you that that second question is actually the more important of the two." Things that never change are important because you can put so much confidence into knowing how they'll shape the future. Bezos said it's impossible to imagine a future where Amazon customers don't want low prices and fast shipping so he can put enormous investment into those things.

Philosophers have spent centuries discussing the idea that there are an infinite number of ways your life could play out, and you just happen to be living in this specific version. It's a wild thing to contemplate, and it leads to the question: What would be true in every imag inable version of your life, not just this one? Those universal truths are obviously the most important things to focus on, because they don't rely on chance, luck, or accident.

Entrepreneur and investor Naval Ravikant put it this way: "In 1,000 parallel universes, you want to be wealthy in 999 of them. You don't want to be wealthy in the fifty of them where you got lucky, so we want to factor luck out of it. ... I want to live in a way that if my life played out 1,000 times, Naval is successful 999 times." In a thousand parallel universes, what would be true in every single one?

A big lesson from history is realizing how much of the world hangs by a thread. Some of the biggest and most consequential changes in history happened because of a random, unforeseeable, thoughtless encounter or decision that led to magic or mayhem. Author Tim Urban once wrote, "If you went back in time before your birth you'd be terrified to do anything, because you'd know that even the smallest nudges to the present can have major impacts on the future." How hauntingly true.

Predicting what the world will look like fifty years from now is impossible. But predicting that people will still respond to greed, fear, opportunity, exploitation, risk, uncertainty, tribal affiliations, and social persuasion in the same way is a bet I'd take.

The other thing to keep in mind is to have a wider imagination. No matter what the world looks like today, and what seems obvious today, everything can change tomorrow because of some tiny accident no one's thinking about. Events, like money, compound. And the central feature of compounding is that it's never intuitive how big something can grow from a small beginning.

The Economist—a magazine I admire publishes a forecast of the year ahead each January. Its January 2020 issue does not mention a single word about COVID-19. Its January 2022 issue does not mention a single word about Russia invading Ukraine. That's not a criticism —both events were impossible to know when the issues were planned in the months before publication. But that's the point: The biggest news, the biggest risks, the most consequential events are always what you don't see coming.

There is rarely more or less economic uncertainty; just changes in how ignorant people are to potential risks. Asking what the biggest risks are is like asking what you expect to be surprised about. If you knew what the biggest risk was you would do something about it, and doing something about it would make it less risky. What your imagination can't fathom is the dangerous stuff, and it's why risk can never be mastered.

think of risk the way the State of California thinks of earthquakes. It knows a major earthquake will happen. But it has no idea when, where, or of what magnitude. Emergency crews are prepared despite no specific forecast. Buildings are designed to withstand earthquakes that may not occur for a century or more. Nassim Taleb says, "Invest in preparedness, not in prediction." That gets to the heart of it.

realize that if you're only preparing for the risks you can envision, you'll be unprepared for the risks you can't see every single time. So, in personal finance, the right amount of savings is when it feels like it's a little too much. It should feel excessive; it should make you wince a little.

A common storyline 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 then rise by just as much, if not more, because those improvements also benefit other people around you, whose circumstances you anchor to. Happiness is little changed despite the world improving.

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. Investor Charlie Munger once noted that the world isn't driven by greed; it's driven by envy.

In 2007 The New York Times interviewed Gary Kremen, who founded Match.com. At the time, Kremen was forty-three years old and worth $10 million. That put him in the top half of 1 percent of people in the country, and probably the top one thousandth of 1 percent of people in the world. In Silicon Valley, however, it made him just another guy. "You're nobody here at $10 million," he said. The Times wrote: "He logs 60- to 80-hour workweeks because he does not think he has nearly enough money to ease up."