Same As Ever
Click here to buy the book.🚀 The Book in 3 Sentences
Same As Ever is a collection of ideas about the things that never change about human behavior, and how that impacts our investing and the world around us.
The book advises focusing on timeless themes, principles, and behaviors for investing instead of stressing over current trends or news.
The key message is that while we can't foresee the future, learning from past behaviors in similar situations helps us prepare for the challenges ahead.
🧠 Key Takeaways
Investing in companies that can withstand the test of time is likely a better, more sustainable approach as opposed to always chasing the latest innovations.
By understanding what never changes about human behavior (things like fear, greed, opportunity, exploitation, risk, etc.), you can make investment decisions that focus on enduring principles rather than short-term market fluctuations.
Real risk lies in what you don't anticipate or foresee. It's the unforeseen events, the black swans, that can have the most significant impact on your portfolio.
We tend to judge our wealth and expectations based on what we see others around us have. Instead of setting our standards for success, and deciding for ourselves what we truly want in life, we tend to just follow the standards set by society or the people around us.
We all have people we admire and want to emulate. It's tempting to think we'd like to trade places with them, but we often forget that along with the good parts of their lives, we'd also have to deal with the challenges.
Market dynamics are constantly fluid, and because of that, the potential outcomes can change at any time. You can be “right” today and “wrong” tomorrow.
When people are convinced that the market won't crash, that's often when it's more likely to happen.
Instead of constantly swinging for the fences, a better approach might be to just focus on consistently getting on base. It might not be as sexy as hitting a home run, but it's a more reliable way to keep progressing.
We all want to believe that we’ll have a strong constitution when our stocks plummet in share price, but we never truly know how we’ll react. We want to believe that we’re the type of investor who will “buy when there’s blood in the streets, even if it’s our own.” But when faced with that situation, our actual response may be totally different. It's important to realize this and to get punched in the mouth by the market because it’ll build resilience in your ability to handle difficult situations.
While patience can lead to significant returns over time, it's important not to mistake it for stubbornly holding onto investments that no longer align with your original thesis.
✍️ Memorable Quotes
“I once had lunch with a guy who’s close to Warren Buffett. This guy—we’ll call him Jim (not his real name)—was driving around Omaha, Nebraska, with Buffett in late 2009. The global economy was crippled at this point, and Omaha was no exception. Stores were closed, businesses were boarded up. Jim said to Warren, “It’s so bad right now. How does the economy ever bounce back from this?” Warren said, “Jim, do you know what the best selling candy bar was in 1962?” “No,” Jim said. “Snickers,” said Warren. “And do you know what the best selling candy bar is today?” “No,” said Jim. “Snickers,” Warren said. Then silence. That was the end of the conversation.”
Some things, like people's preferences for certain products (Coca-Cola, Hershey’s chocolate, Starbucks coffee) or the necessity of services (such as pest control and waste management), tend to remain constant over time.
Applying that to investing, look for companies with products or services that are likely to stay in demand over the long term, and have proven their resilience and stability.
Investing in companies that can withstand the test of time is likely a better, more sustainable approach as opposed to always chasing the latest innovations.
“I try to keep two things in mind in a world that’s this vulnerable to chance and accident. One is highlighting this book’s premise—to base predictions on how people behave rather than on specific events. Predicting what the world will look like fifty years from now is impossible. But predicting that people will still respond to fear, greed, opportunity, exploitation, risk, uncertainty, tribal affiliations, and social persuasion in the same way is a bet I’d take.”
While you may not be able to predict the exact events that will shape the market in the next fifty years, you can rest assured that human behavior will continue to drive market dynamics.
By understanding what never changes about human behavior (things like fear, greed, opportunity, exploitation, risk, etc.), you can make investment decisions that focus on enduring principles rather than short-term market fluctuations.
This approach will allow you to navigate the unpredictable ups and downs of the market with a more grounded and resilient approach.
“Every event creates its own offspring, which impacts the world in their own special ways. It makes prediction exceedingly hard. The absurdity of past connections should humble your confidence in predicting future ones.”
The world is complex, and the connections between events are often absurdly intricate. Therefore, as investors, we should be humble in our confidence about predicting the future.
Ultimately, you’re better off spending time trying to understand the fundamental strengths of the businesses you invest in. In doing so, you’ll have an easier time weathering the uncertainties and navigating the ever-changing, unpredictable landscape of the stock market.
“As financial advisor Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything.” That’s the real definition of risk—what’s left over after you’ve prepared for the risks you can imagine. Risk is what you don’t see.”
As investors, we tend to focus on the more obvious risks — market fluctuations, economic downturns, and the like.
While you can cover your bases in these departments, real risk lies in what you don't anticipate or foresee. It's the unforeseen events, the black swans, that can have the most significant impact on your portfolio. Think the Great Financial Crisis, COVID-19, etc. — these are the risks that catch you off guard and can lead to substantial losses if you don’t act accordingly.
With that said, it’s important to acknowledge that you can never eliminate all risks. There will always be uncertainties beyond your control. In order to defend against that, you want to adhere to an investment approach that can withstand these unforeseen risks. This means investing with a margin of safety, investing in fundamentally strong companies, and maintaining a long-term perspective.
“Put another way: 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.”
Investors try to avoid risk by predicting what will happen next and acting accordingly, but it's an impossible task because the truly perilous situations are those we haven't even considered.
So, instead of trying to master risk, you should focus on building a resilient portfolio that can withstand unforeseen events. It’s not always about making the most money during the good times, it’s about losing the least amount (if any) during the unpredictably bad times.
Risk can never be fully controlled or eliminated, but it can be managed wisely. Defense over offense.
“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. ”
Once again, defense over offense. Preparedness over prediction.
Instead of trying to forecast every twist and turn of the market, you should work on building a resilient portfolio that can withstand whatever the market (and the world) throws at you.
“There is no such thing as objective wealth—everything is relative, and mostly relative to those around you. It’s the path of least resistance to determining what life owes you and what you should expect. Everyone does it. Subconsciously or not, everyone looks around and says, “What do other people like me have? What do they do? Because that’s what I should have and do as well.”
We tend to measure our own wealth and success by comparing ourselves to others — especially those around us. We look at what others similar to us have achieved or acquired and think, "Well, if they have it, then I should have it too." Most of the time, we do this without even realizing it.
In other words, we tend to judge our own wealth and expectations based on what we see others around us have. Instead of setting our own standards for success, and deciding for ourselves what we truly want in life, we tend to just follow the standards set by society or the people around us.
But this is like taking the easy way out because it’s simpler to compare ourselves to others rather than figuring out our own desires and goals independently. It’s also a never ending pursuit because there is a never ending supply of people who have more than you, and you’re reminded of that every time you scroll through social media.
Overall, in this case, you shouldn’t take the easy way out.
Thinking about what you really want out of life is a scary thing to do, and committing to pursue it is even scarier. But like Greg Plitt said, “If you don’t come up with your own plan, you’ll become the plan of someone else.”
And that’s the last thing you should want. You only have one go-around at this life. Do it your way.
“The key thing is that unique minds have to be accepted as a full package, because the things they do well and that we admire cannot be separated from the things we wouldn’t want for ourselves or we look down upon. ”
We all have people we admire and want to emulate. It's tempting to think we'd like to trade places with them, but we often forget that along with the good parts of their lives, we'd also have to deal with the challenges.
Take celebrities like Brad Pitt, for instance. While international stardom might seem exciting, it also means completely losing your privacy and being bombarded quite literally everywhere you go. Imagine not even being able to buy groceries in peace.
Then there's Warren Buffett, a god amongst investors. Many of us aspire to his success, but his achievements have also come at a cost. Buffett's intense focus on business led him to neglect his family and relationships. Despite being a stellar investor, he sacrificed meaningful connections with the most important people in his life.
“Most of what people care about is, “Were you right or wrong?” “Was that a yes or a no?” Probability is about nuance and gradation. But in the real world, people pay attention to black-and-white results. If you said something will happen and it happens, you were right. If you said it will happen and it doesn’t, you were wrong. That’s how people think, because it requires the least amount of effort.”
In probability, things are rarely just "yes" or "no.” You can often find a range of possibilities with varying degrees of likelihood.
In real life, however, people tend to think in black-and-white terms. If you predict something will happen and it does, you were "right," and if it doesn't happen, you were "wrong." There is no in-between.
But as it pertains to investing, there are many variables and uncertainties to consider. Market dynamics are constantly fluid, and because of that, the potential outcomes can change at any time. You can be “right” today and “wrong” tomorrow.
Investing is what Simon Sinek calls an “infinite game,” which is exactly what it sounds like. Infinite games don't have a finish line. And because there is no finish line, there is no such thing as winning. There is only progress.
Still, many investors are too quick to draw conclusions. If an investment is currently up, the decision was "right," and you’re a winner. If it’s down, the opposite.
Overall, I think the goal is to just keep playing the game. Any bit of progress is a step in the right direction.
Keep climbing.
“Stability is destabilizing.”
Stemming from Hyman Minsky’s financial instability hypothesis, when an economy is stable for a period of time, people get optimistic. When people get optimistic, they take on more debt. With more debt, the economy eventually becomes unstable.
According to Morgan Housel, “a lack of recessions actually plants the seeds of the next recession, and that’s why we can never get rid of them.” It’s a vicious cycle driven by human psychology.
This concept also applies to the stock market. When investors are feeling optimistic, they start buying more stocks, which drives prices up. Over time, this optimism can lead to a situation where even a whiff of bad news can cause a big reaction in the market, because people aren’t used to it.
Interestingly, when people are convinced that the market won't crash, that's often when it's more likely to happen. That's why analysts look at things like the fear/greed index.
If people are overly confident in the market, it could be a sign that a crash is coming, even though most people aren't expecting it.
“The only way to know we’ve exhausted all potential opportunity from markets—the only way to identify the top—is to push them not only past the point where the numbers stop making sense, but beyond the stories people believe about those numbers.”
Analyzing financial data or trends may not be enough to determine when the market has reached its highest point. We must also consider the stories and beliefs people have surrounding the market.
If everyone is overly optimistic, even if the data look good, it could still indicate that we're nearing a peak because optimism may have inflated prices beyond what's reasonable.
“Most great things in life—from love to careers to investing—gain their value from two things: patience and scarcity. Patience to let something grow, and scarcity to admire what it grows into.”
Literally right before I sat down to read this chapter, I was analyzing my YouTube channel growth and my newsletter growth over the last few months. Fortunately, things have been consistent in both departments. The growth hasn’t been too overwhelmingly aggressive, but it’s there, and it’s steady.
Overall, I’m pretty happy with it.
Still, while looking at the numbers, I couldn't help but wonder how I could speed things up. Even though things are steadily trending in the right direction, I still want it to happen faster.
Coincidentally, this chapter talks about that exact mindset.
One of the first few lines reads, “Whenever people discover something valuable—particularly a lucrative investment or a special skill—there is a tendency to ask, “Great, but can I have it all faster?” Can we push it twice as hard? Can we make it twice the size? Can we squeeze some more juice out of it?”
When I read that, it felt like a sign, so I let go of those impatient thoughts and focused on being grateful that my channel and newsletter were even growing at all.
Overall, I feel incredibly fortunate. I get to wake up every day and do what I love, surrounded by the people I care about. Sure, faster growth would be nice, but I'm happy with where I'm headed at this pace. I trust that if I stay disciplined and keep working at it, the growth will continue.
I know that in six months, I'll be further along than I am today, just like I'm further along now than I was six months ago. The same goes for my investments—I'm really pleased with how my portfolio and investing acumen have progressed over the last few years.
“If you understand the math behind compounding, you realize the most important question is not “How can I earn the highest returns? It’s “What are the best returns I can sustain for the longest period of time?” Little changes compounded for a long time create extraordinary changes.”
Everyone wants to hit a home run. And to be fair, why wouldn’t you want to knock it out of the park?
When you connect, and you hear the crack of the ball against the bat, it’s the best feeling in the world. At the same time, swinging for the fences also carries a high risk of striking out, which most batters actually do.
One of the oldest and most universal tools to measure a hitter's success at the plate is the batting average, with the league-wide batting average hovering at around .250. This means that a player does not perform at the plate 75% of the time.
Instead of constantly swinging for the fences, a better approach might be to just focus on consistently getting on base. It might not be as sexy as hitting a home run, but it's a more reliable way to keep progressing.
In investing, those consistent gains add up over time. The longer you do it, the better it gets. And importantly, the gains help cushion the impact of any downturns or losses you might experience along the way.
“The best financial plan is to save like a pessimist and invest like an optimist. That idea—the belief that things will get better mixed with the reality that the path between now and then will be a continuous chain of setback, disappointment, surprise, and shock—shows up all over history, in all areas of life.”
This just goes back to the whole idea of preparedness over prediction.
Prepare yourself financially, expecting that tough times may come. By saving diligently and living below your means, you create a buffer against unexpected setbacks, whether they be personal emergencies or economic downturns.
And don’t forget, the best time to buy stocks is when they’re down.
On the other hand, it's important not to let fear and paranoia hold you back from reaching your long-term goals. Despite the inevitable setbacks and challenges that life and the market may throw your way, you need to have faith in a brighter future, and you have to keep investing.
Investing like an optimist means believing in the potential for growth and prosperity over a long period of time. It's about recognizing that, despite short-term catastrophes, great investments will appreciate in value over the long haul.
“When you realize that progress is made step-by-step, slowly over time, you realize that tiny little innovations that no one thinks much of are the seeds for what has the potential to compound into something great.”
Nothing worthwhile happens overnight, and it doesn’t come easy. This is especially true when it comes to dividend investing. Unless you have a million dollars to invest all at once, the trek to financial freedom will be long, and it will happen gradually, step-by-step.
That may not sound too appealing, but if you’re willing to commit to the journey, the potential of what can be is incredible, and in my opinion, is totally worth it.
It’s a sacrifice today for the betterment of tomorrow, and each day ahead will look brighter than the one before.
Dividend investing is one of those things that just gets better with time, and if you’re willing to start at ground zero and go from there, all the incremental progress you will make along the way will compound into something far greater than what you expected.
And the longer you stick with it, the better it gets.
“Unexpected hardship makes people do and think things they’d never imagine when things are calm. Your personal views fall into the same trap. In investing, saying “I will be greedy when others are fearful” is easier said than done, because people underestimate how much their views and goals can change when markets break.”
Not a day goes by that I don’t see someone online write “Be greedy when others are fearful.” The context is usually regarding subpar companies whose share prices have seen a big drop, which is typically for good reason.
Still, it’s a good quote, and it's not always easy to heed its advice when it really counts. As Mike Tyson famously said, “Everyone has a plan until they get punched in the mouth.”
We all want to believe that we’ll have a strong constitution when our stocks plummet in share price, but we never truly know how we’ll react. We want to believe that we’re the type of investor who will “buy when there’s blood in the streets, even if it’s our own.”
But when faced with that situation, our actual response may be totally different. It's important to realize this, and to actually get punched in the mouth by the market because it’ll build resilience in your ability to handle difficult situations.
Going through these experiences will make you stronger and better able to stick to your plan when things get tough, which they will.
“Patience is often stubbornness in disguise.”
In investing, patience means having the discipline to stick to your guns when there are short-term setbacks. It involves waiting for the right opportunities and allowing time for your investments to grow and compound.
However, there’s a fine line between being patient and being stubborn.
Being stubborn in investing means refusing to cut your losses when you know that you should, and it’s rationalized by a “buy-and-hold strategy” that deflects from admitting your mistakes.
It's important to have the objectivity to reassess your investments when necessary.
While patience can lead to significant returns over time, it's important not to mistake it for stubbornly holding onto investments that no longer align with your original thesis.