Morgan Housel, the author of The Psychology of Money and a partner at Collab Fund, talks about his new book, Same as Ever, on the virtues of ancient truths in a world where everything seems to be changing. We also talk about why so many successful people are miserable, why great ideas don’t scale, the difference between happiness and contentment, the wisdom of a Snickers bar, the downsides of fully optimized culture, and how to write.
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In the following excerpt, Morgan Housel talks with Derek about what inspired his new book and why it’s better to pay attention to the things that never change than the things that are always changing.
Derek Thompson: I’m doing great. Your book is great. I’m so excited to talk to you about it.
Morgan Housel: Thank you.
Thompson: Let’s start where the book starts. What did Warren Buffett say about Snickers?
Housel: This is a year or two ago. I was having lunch with a guy who was very close with Warren Buffett, and he was telling me a bunch of stories—not a lot of Buffett stories that are not already well-known and well-played out, but this is one that I had never heard. It was an experience that he had. This guy was driving around Omaha with Warren Buffett in 2009. And during that period, the economy is in wreckage from the housing bust, the Great Recession. And my friend says to Warren, “Warren, how are we ever going to get out of this? The economy is such a mess. How does this ever change?” And Warren says, “Do you know what the bestselling candy bar was in 1962?”
And my friend says, “No.” And Warren says, “Snickers.” And then Warren says, “Do you know what the bestselling candy bar is today?” And my friend says, “No.” And Warren says, “Snickers.” And he said that was it. That was the end of the conversation. The obvious takeaway is just some things never change. You don’t have to sit here and say, “What’s going to change in the future?” Some things never change, and that’s what you pay attention to. And I think Buffett as an investor, that’s when he’s done it. And that was one of many little stories that I came across where I was like, yes, that’s how you see the future: by predicting what’s not going to change. And a lot of this was my background as a writer, as a financial writer, and I’m sure you can relate to this as well. One thing that’s always bothered me is how bad we are as an industry at predicting recessions, bear markets.
Nobody can do it. Nobody can do it. And there are two things you can do with that information. One is you can just become kind of a cynic and say, “Nobody knows anything. Don’t even try.” Or what I kind of started leaning toward was: Let’s try to find the things that never change and focus all of our attention on those and not pretend like we can focus on and predict the things that are going to change. That was some of the genesis of this book, and not just the book, but how I’ve changed my thinking over the last decade.
Thompson: The idea that there is wisdom in paying very close attention to what does not change, despite so many market forces and cultural forces trying to get us to pay attention to things that just changed, I think it’s a really sneaky, powerful idea. It’s powerful at the level of individuals. It’s powerful at the level of the collective. It applies so powerfully to our business, the news. I mean, the word’s right there: the news. You have this fact in the book that the age-adjusted death rate from heart disease has declined ... 1.5 [percent] on an annualized basis. There is no headline in any newspaper or any magazine that points out the annual decrease in age-adjusted death rate from heart disease. And yet its decline might be one of the most powerful stories in the world.
And I am constantly on the lookout for ideas like this, finding ways to make interesting that which is more important than it is new. Does that make sense? Right. And that’s what this book is about, it seems to me: trying to get us to see that there is so much value in that which is old. It reminds me, there is a line from the British author Martin Amis—where he’s describing writing—where he says, “Writing is a war against cliché.” And I love that idea, but in a way, living is a war against the war against cliché. There’s so much in life that’s trying to get us to forget the oldest wisdom. There’s so much that’s competing for our attention that’s trying to get us to lose grip of that—which is those ideas that have stood the test of time. And so much of a good life is staying in touch with those ideas despite the chaos that’s swirling around us.
Housel: I mean, both you and I are writers. I heard this idea from Nassim Taleb recently, where he was like, “If you’re a writer today and you want to be read in the future—you’re writing a book and you hope that people will read it 20 years from now—write a book that people would have read 20 years ago.” That’s how you do it. And if your book is not timeless in the past, if it wouldn’t have been relevant to somebody 20 years ago, it’s probably not going to be relevant to somebody 20 years from now. I thought that was just such a great way to put this, and that’s what I want to do with my writing. So years ago, I was a columnist at The Wall Street Journal, and whenever I would write a column, sometimes the editors would say, “Hey, good column, but what does this have to do with this week’s news?”
And I understood why they did that, but I always wanted to push back and say, “I think it should be the opposite. I think if an article is only relevant this week, it’s not relevant at all.” I only want to read things that I’m still going to care about five, 10, 50 years in the future because those are the things that I know I can put a lot of emphasis into. And one other cliché here, one of the things that’s really hard with writing, is that the style of writing changes over time. So there are a lot of books that were so popular 100 years ago that if you tried to read them today, it’s written in not quite Old English, but it’s so hard to read. But the best books, the most important truths people have been saying forever. There’s this great quote that I love from ... Who was it who said this?
He says, “The wise have always said the same things, and fools have always done just the opposite.” And he says this [hundreds] of years ago. These things have always been true of how to live a good life, how to invest your money appropriately. So many of these things don’t change over time. The details change, the characters change, but it’s the same movie over and over and over again. One of the things that really got me into the idea for this book too is my favorite finance book that’s ever been written; [it’s] a book called The Great Depression: A Diary. I may have talked about it with you on the show before. It’s just sensational. And it’s this guy, it’s this lawyer in Ohio named Benjamin Roth, who kept a diary during the Depression, and during that, there’s an entry in there from 1932, where I read it and I thought to myself, If you change the dates on this post to 2008, everything he said would’ve fit right into what happened in 2008.
And then two pages later, he writes in his diary in 1932, he says, “If you change the dates from 1932 to 1894, everything would’ve fit in.” It’s the exact same thing that happened in 1932 [that] happened in 1894. So then it was like, yeah, see, it’s the same movie over and over and over again. The characters change about who’s causing the financial crisis, but how people react to greed and fear and uncertainty never changes. It won’t change 100 years from now. Let’s put all of our focus into that. Let’s not pretend that we know what GDP in Q4 of next year is going to do. Let’s just focus on the things that never change.
This excerpt was edited for clarity. Listen to the rest of the episode here and follow the Plain English feed on Spotify.
Host: Derek Thompson
Guest: Morgan Housel
Producer: Devon Manze
Subscribe: Spotify
