Iterations: Morgan Housel

Past performance is the most significant predictor of future performance.

Lost in this statement is the nuance within the wisdom.

Both of these things can be true.

1.) Past performance is the most significant predictor of future performance.

2.) Past performance only correlates 10% with future performance.

My point is that past performance may be the best predictor, but that does not mean it is infallible or even reliable.

It’s just the best out of a lot of lackluster options.

It’s the easiest to observe.

It’s measurable but still quite flawed.

Past predictors can guide us, but they are not the answer – especially when it comes to dynamic or developing environments.

Morgan Housel is one of my favorite writers and one of the reasons I started writing online.I wrote this post after reading his book The Psychology of Money. A similar post can be found here.

The tipping point of misinformation

It’s tough to measure precisely, but various sources estimate that bot traffic makes up between 25 and 50 percent of web traffic.

At a certain point, the default response to an online comment or a product review will be “that’s fake.”

Fake Amazon reviews are already an issue.

The internet has (had?) the potential to be an incredibly powerful tool for sharing information, ideas, and reviews openly and honestly. That same openness made it incredibly easy to exploit.

Within 25 years, we may go from “this information came from the internet so it can be trusted to “this information came from the internet, so it can’t be trusted.”

So, where do we go from here? 

Is there an opportunity for smaller communities to form with an emphasis on trust and accuracy? On verified humanity?

 Will we see emerging marketability of “Realness?”

The middle

It takes work to stay in the middle on an issue.

It is not a fixed state but a moving target. It’s a balancing act that fatigues.

Your mental/philosophical core must be stable.

To stay in the middle takes constant effort. The simplicity of the extremes pulls you constantly, begging for you to lean, then fall, in either direction.

Those who are not in the middle will actively try to pull you in their direction.

Forces encouraging you to stay in the middle are quieter. 

Weaker

But worthwhile.

On anger

Anger is easy for us to attain.

Anger feels good – the rush of adrenaline and dopamine.

Anger is readily available, it costs nothing in the short term, and feels good.

It’s no wonder we often succumb to anger.

Anger yields diminishing returns. Think about people you know who are known for anger or angry outbursts. Those near them grow numb to it.

Anger is ugly. Picture an angry person. Is anger attractive?

Anger never really accomplishes anything in the long term.

The net present value of anger is negative.

No or “No the Now?”

This post is where James Clear (Idea #2 in this post) and Braveheart meet.

James Clear said it exceptionally well (as he always does), but I would add two things to his advice.

1.) Recognize that the more nervous you are about the request, the more likely you will pick up on negative signals that may not be there.

2.) Rather than ask later, ask differently. Immediately responding to a “no” with “No, or not right now?” is a powerful response.

Advice I gave today

1.) If there is more demand than supply for a role you want in the next 3-5 years, look for alternate paths to the position. Many people will plan to be an ideal candidate through the front door or the standard application process. That is the most hardened path.

Think strategically about “side doors” that may be underused.

Example: Many people seek advice about how to get a job in private equity or venture capital. They look at a core set of internships, educational achievements, etc., as the most logical path. A side door may be to do excellent work for VC or PE held company or do specialized consulting work for a VC/PE held company (or the firm itself) and deliver exceptional results.

2.) Leverage your existing brand/career equity to get access to jobs you would otherwise have no chance of getting.

Example: You want to be a CFO someday, but you are a top-performing, mid-level operations leader with no experience or education in finance. Your odds of getting a mid-level finance role outside of your organization are near-zero. But, your odds of getting a mid-level finance role inside your organization are exponentially higher. Most people do not adequately leverage their existing success/brand to get diversified/stretch experience.

3.) For long-term planning, look at job descriptions for the roles you want to have and chase the necessary experiences.

Example: You want to be a CFO someday. Look at 5-10 CFO job postings for a company with characteristics that match what you have in mind. (Note -it’s essential to be as specific as possible. A $10M startup CFO is quite different than a $50B global CFO of a public company). You’ll be shocked at how many of the preferred experiences are the same. These experiences make up your 5-year to-do list.

Chase them.

Online arguments

Sending someone a link to an article or post is not a counterargument or a point made.

Would you change your mind concerning a fundamental aspect of your identity based on a single argument?

Or would you go out and find readily available counterpoints to further cement the original position?

It’s rarely going to change an opinion but instead leads to further entrenchment for all but the undecided few.