We nationalized risk, socialized failure, taxed boldness, and administered everything else. Result: a magnificent country that builds nothing anymore, that manages its decay with a funereal elegance, and where the most gifted young person dreams of only one thing—leaving.
Freedom doesn't die assassinated. It dies anesthetized, to applause.
Let me tell you the secret to investing.
There is no secret.
Sorry to break it to you, but there is no Holy Grail that guarantees overnight riches in the markets. There's no confidential stock-picking scheme that will give you all of the upside with none of the downside. . . .
It has to be this way because risk and reward are attached at the hip. If you want to earn a return on your capital, you must accept risk in some form. One of the few iron laws of investing is there is no free lunch.
Ben Carlson, from his introduction to Risk & Reward
When stakes are low, possibility is our playground. Curiosity is our guide. Mistakes are data. And the real reward is in watching yourself evolve.
-Tanmay Vora, from here
As a banker and financial journalist, Bagehot observed that outbreaks of financial recklessness did not occur at random. Rather, they tended to appear at times when money was easy and interest rates lot. He expressed this insight in his own inimitable fashion: "John Bull can stand many things, but he cannot stand two percent." When interest rates fell to such a low level, investors reacted to the loss of income by taking greater risks. In modern language, they engaged in "yield chasing". John Bull—that personification of English common sense—made his first appearance in Bagehot's writing in an article for the Inquirer published on 31 July 1852:
‘John Bull’, says someone, ‘can stand a great deal, but he cannot stand two per cent . . .’ Here the moral obligation arises. People won’t take 2 per cent; they won’t bear a loss of income. Instead of that dreadful event, they invest their careful savings in something impossible – a canal to Kamchatka, a railway to Watchet, a plan for animating the Dead Sea, a corporation for shipping skates to the Torrid Zone. A century or two ago, the Dutch burgomasters, of all people in the world, invented the most imaginative occupation. They speculated in impossible tulips.
-Edward Chancellor, The Price of Time: The Real Story of Interest
Most of us cannot hide from the world. We have responsibilities that require engagement and personal skills that will be lost without frequent connection to other people.
If
everything we do requires that we have an iron-clad assurance of safety, we’ll
be on our way to becoming hermits. No great civilization was ever built and
maintained by hermits
-Michael Wade, from this episode
Investing would be a lot easier if there were no uncertainty. If someone could just kindly tell you where all of the landmines are buried ahead of time, you could side them completely and go on with your life.
Life doesn’t work like that, unfortunately. Uncertainty is always at all-time highs because no one knows what’s coming next. The hard part is there is this human need for control in life, even if that control is an illusion.
You have no control over what happens with taxes, trade, tariffs, the Fed, interest rates, economic growth, inflation, earnings or stock market returns. None. So it’s really your reaction to the uncontrollable events that determines your success or failure as an investor.
-Ben Carlson, from here
...............................of one of these things in third grade at Merion Elementary School. Landed on my head. Might explain a lot.
Unless we, both as individuals and as a society, start to embrace a genuine existence that brings risks of failure, unpleasantness, and unpredictability as well as achievement, happiness, and love, we will eventually wind up in a very artificial and narrow existence: a prison cell of our own making.
-Michael Wade, as culled from here
If one cares about safety (and who doesn't), one does well to take a skeptical look at the safety-industrial complex, and its reliance on moral intimidation to pursue ends other than safety.
. . . if left unchallenged, the pursuit of risk reduction tends to create a society based on an unrealistically low view of human capacities. Infantilization slips in, under cover of democratic ideals. I will insist, on the contrary, that democracy remains viable only if we are willing to extend to one another a presumption of individual competence. This is what social trust is built on. Together, they are the minimal endowments for a free, responsible, fully awake people.
-Matthew Crawford, Why We Drive: On Freedom, Risk and Taking Back Control
Investing is hard, but it doesn’t need to be as hard as people make it. As John Rahm and Scottie Scheffler illustrate, success can come in very different forms, so long as you consistently adhere to your process.
Risk-seeking and risk-mitigating can both be successful strategies, so long as you are disciplined enough to stick to them.
-Ted Lamade, as excerpted from here
I may know who and what I am. I cannot know in advance who or what I could become. There are certain risks you have to take, such that only in retrospect can you know whether you were right to take them, and perhaps not even then.
-Rabbi Jonathan Sacks, The Great Partnership: Science, Religion, and the Search for Meaning
- All quotes used by Morgan Housel in his new book
Over time, however, beginning in the 1960s and accelerating in the 1980s, the implicit understanding shifted from that of children as competent, responsible, and resilient to the opposite, as advice focused increasingly on children’s needs for supervision and protection. Rutherford noted, as have other reviewers, that in some respects—such as freedom to choose what they wear or eat—children have gained autonomy over the decades. What has declined specifically is children’s freedom to engage in activities that involve some degree of risk and personal responsibility away from adults.
My thesis is that it’s not just the kids.
The line between “inspiringly bold” and “foolishly reckless” can be a millimeter thick and only visible with hindsight. But it’s easy to view the process that led to successful outcomes as something to emulate, and the process that led to failures as something to avoid.
-Morgan Housel, from here
...................................change and risk:
Increasing health and falling fertility has been making our world older, and I think this is a big reason for the many ways it has been decaying and declining. Old secure folks are less willing to allow risky innovations or changes. They care more about keeping what they have than about maybe getting much more. Problem is, without sufficient change even what we used to have will slowly fade away.
The issue of "student debt" doesn't seem to be going away. My parents paid for my education, my wife worked her way through school paying her own way, and we paid for our kids' education. All of which may explain my lack of sympathy for those who find themselves deeply indebted by the acquisition of a degree that won't pay for itself. Been reading stuff recently suggesting the radical notion that colleges should bear some responsibility and participate in the resolution of this problem. Here is an interesting proposition from 2017.
The real issue, though, isn’t outright fraud — it’s that colleges are partially insulated from basic market forces, and they behave accordingly. They have financial incentives to enroll as many students as possible, and little incentive — or at least, little direct financial incentive — to ensure that those students will graduate on time and find jobs that pay well enough to repay their loans. The issue is particularly acute at less selective institutions including, but not limited to, for-profit colleges.
One proposed reform to the student loan system that has bipartisan support is known as risk-sharing. In its simplest form, a risk-sharing system would directly tie an institution’s finances to the outcomes of its students.
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