We are more often frightened than hurt; and we suffer more in imagination than in reality.
The chains of habit are too light to be felt until they are too heavy to be broken. Most investors underestimate how much their early portfolio habits — the things they barely notice doing — compound into the architecture of their entire financial life.
The moment we want to believe something, we suddenly see all the arguments for it, and become blind to the arguments against it.
The best investment you can make is in businesses you understand, and the second-best is in your own ability to understand more businesses. Most investors do neither — they buy what's rising and call it research.
We are reluctant to acknowledge the full scope of what we owe to luck, because our vanity rebels against the suggestion that our qualities cannot by themselves have produced our good fortune. It is hard to endure the thought that someone else might equally well have done what we have done.
Invert, always invert. Many hard problems are best solved when you turn them around in reverse. It is not enough to think about what you want — think equally hard about what you want to avoid, and you will find that removing stupidity is often more valuable than adding brilliance.
When Claire tests her own onboarding flow, she naturally follows the happy path. She fills out every required field, clicks 'next,' and never intentionally tries to break anything. Codex tested the flow as both a team and an individual, pushed on required-field edge cases, and immediately uncovered a blocking bug that had survived for months simply because Claire always completed the form correctly.
We deceive ourselves if we imagine that we can ever be passive, impartial observers. Every perception, every scene, is shaped by us, whether we intend it or know it, or not. We are the directors of the film we are making — but we are its subjects too: every frame, every moment, is us, is ours.
"…is the tendency for adults over forty to have increased or enhanced recollection for events that occurred during their adolescence and early adulthood."
The market for something to believe in is infinite. But the market for something that actually works is much smaller, and far more competitive. Most investors confuse the two.
Most turnaround stories are told years later, by the winner, after the ending is already known. That's why they always sound clean and polished. This one doesn't have an ending yet, and it's anything but clean and polished.
We are always making gods of those who are indifferent to us, and martyrs of those who love us.
Investors often make the mistake of confusing a exciting industry with a profitable one. The trick is not to find industries that are growing fast, but to find companies that can keep competitors from eating their lunch.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt.
You do hear people say privacy is dead, but it's almost always someone who stands to profit from the death of privacy—famously, Mark Zuckerberg. This is a hopeful pitch.
We are very bad at feeling exponentials from the inside, and we are currently inside one. I think this also explains the turbulence around AI better than the usual stories about hype. AI is not capable of being a real cybersecurity threat until suddenly it is, causing sudden and improvised policy changes at the highest level of government.
You don't need to recover what you've spent. You need to decide whether the future costs are worth the future benefits, completely independent of the past. The sunk cost fallacy is just the inability to make that distinction.
The obscure we see eventually, the completely apparent takes longer.
The most thought-provoking thing in our over-thought world is that most people never think at all. And those who do think do not think enough — for most of their thinking is thinking about their thinking, which is no thinking at all.
We do not see things as they are. We see them as we are. And when we change, all things change with us — not because the world has shifted, but because the lens through which we read it has.
"I think staying ahead is wildly overrated," he told me. "This idea that everyone is selling — that you have to either get on the AI train or get left behind — is pernicious and frankly wrong."
Composed players aren't actually perceiving time more slowly than those around them. Their brains are just better at predicting what comes next, so they're preparing their next move while everyone else is still processing the current one. The stillness is a byproduct. The speed was spent earlier, in the reading rather than running.
The record of a man who makes consistently good decisions in complex situations is almost always a record of a man who has reduced the number of decisions he has to make. The more choices you face, the more your judgment degrades.
The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a less compelling investment.
The demand to be loved is the greatest of all arrogant presumptions.
The best investors I know have a strong view about the future, but they hold it loosely — they're always looking for evidence that they're wrong. Conviction without flexibility is just stubbornness dressed up as confidence.
It is not the healthy who need a doctor, but the sick. I have not come to call the righteous, but sinners — yet what is health but the name we give to our present ignorance of what ails us?
When we are hurt in a relationship, when we are spinning in the blooming buzzing confusion of sensemaking, the explanation we elect as correct usually has more to do with our own fears and vulnerabilities than it does with the reality of the situation; almost always, that explanation is wrong; almost always, the true explanation has more to do with the fears and vulnerabilities roiling in the other person invisibly to us.
The biggest risk isn't that you'll lose money — it's that you'll succeed, and then make a bigger, more confident bet on something you don't actually understand as well as you think you do.
The chain of logical steps from 'this is a good company' to 'this is a good investment at any price' is one of the most dangerous in finance. Quality is not the same as value, and confusing the two has ruined more intelligent people than stupidity ever has.
"These models are so amazing, it creates this illusion that it will be able to do everything, because you can experience GPT-3, you can experience GPT-3.5, right? And then you extrapolate what that's going to mean for size and scale in a way that's very logical, but it's not rooted in the reality of what a transformer is, right?"
The ability to destroy your ideas rapidly instead of slowly when the occasion is right is one of the most valuable things you can have. You have to work hard on it. Ask yourself what are the arguments on the other side. It's painful, but it works wonders.
Our experiment involves 1,500 participants in 30 decision environments spanning core domains in economics and the social sciences…[W]e find that AI advice depolarizes choices on average, moving participants away from their initial leanings. This depolarization arises despite the LLM being measurably sycophantic: it disproportionately offers considerations that support users' initial leanings and uses agreeable and flattering language.
Invert, always invert. Many hard problems are best solved when you turn them around in reverse. It is not enough to think about what you want to achieve — ask yourself what would guarantee failure, then avoid it.
We are very bad at feeling exponentials from the inside, and we are currently inside one. AI is not capable of being a real cybersecurity threat until suddenly it is, causing sudden and improvised policy changes at the highest level of government. Markets discount whether AI might threaten to undermine a business model until suddenly it can, leading to massive swings in stocks.
We know accurately only when we know little; with knowledge doubt increases.
The investor's chief problem — and even his worst enemy — is likely to be himself. In the end, how your investments behave is much less important than how you behave.
Against this utter choicelessness in the variables we each drew from the cosmic lottery — our pigments, our neurotransmitters, our outpost in space and in time — it becomes downright absurd to grow attached to the story and its byproducts: opinions, identities, absolutisms. It is a salutary thought experiment to go through a single day imagining any one of those variables having fallen one one-thousandth of a degree elsewhere on the plane of possibility — suddenly, the person going through your day is not you.
We are apt to think that our ideas are a measure of things; but they are only a measure of ourselves.
The historian must not try to know what is truth, if he values his honesty; for, if he cares for his truths, he is certain to falsify his facts.
We are all capable of believing things which we know to be untrue, and then, when we are finally proved wrong, impudently twisting the facts so as to show that we were right. Intellectually, it is possible to carry on this process for an indefinite time: the only check on it is that sooner or later a false belief bumps up against solid reality, usually on a battlefield.
The greatest obstacle to discovery is not ignorance — it is the illusion of knowledge.
The care and intentionality is beside the point, and our confidence in such vigilance probably works against us in the long run. 'The teams using AI most carefully are the ones losing the ability to tell a good option from a merely safe one. The malformation doesn't skip the diligent. It recruits them.'
It is not irritating to be where one is. It is only irritating to think one would like to be somewhere else.
You've probably been told that better choices come from more data or sharper reasoning, but neuroscience shows us that our choices are fundamentally emotional. Our feelings are the underlying 'context-setters' on which our rational brain acts. When we avoid certain emotional states, our solution set becomes constrained in ways we may not even be aware of.
The obscure we see eventually. The completely obvious, it seems, takes longer.
Agents are relentless in a way humans can't be. Agents will try 14, 15, 20 different approaches to trigger a bug without getting tired or losing focus. Brian found bugs that required the agent to try 14 times before succeeding. As Brian notes, "Cognitive energy declines over time in a way that agents don't."
Mimicking the herd invites regression to the mean. If your portfolio looks like everyone else's, you may feel comfortable, but all you can expect is average performance. It's only by departing from the consensus that you can achieve superior results — but departing from the consensus is where career risk lives, and most investors won't do it.
Obstacles are the universe's hubs of unspeakable creativity, redeeming us from tired victories, from the banality of crossing the finish line, from the soundtrack of getting everything we want, and especially from the hubris of thinking we are in control. The moment an obstacle bisects the trajectory of intent, it creates a natural midpoint that is both an end and a beginning, but also something else entirely, for it lives on a different plane from the strict linearity of the will as cause and its intended effect.
The universe is not required to be in perfect harmony with human ambition. And yet, the most dangerous of all falsehoods is a slightly distorted truth, for a straight-out lie can be detected and opposed, but a half-truth insinuates itself into the understanding and breeds there.
Underscored — save the words that stop you in your tracks.
Start saving quotes →