The Compound and Friends - Things That Never Change With Morgan Housel

Episode Date: November 24, 2023

On episode 119 of The Compound and Friends, Michael Batnick and Downtown Josh Brown are joined by Morgan Housel to discuss: Morgan's new book "Same as Ever: A Guide to What Never Changes," what the OpenAI board got wrong, writing that stands the test of time, and much more! Pick up Morgan's book here: https://sites.prh.com/morganhousel Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnick, and their castmates are solely their own opinions and do not reflect the opinion of Ritholtz Wealth Management. This podcast is for informational purposes only and should not be relied upon for any investment decisions. Clients of Ritholtz Wealth Management may maintain positions in the securities discussed in this podcast. Alright, I think everything's working because Duncan didn't jump in to stop it. So we're going to proceed as if, Hey everybody. Wait, hold on. Hold on. Hold on. Hold on. Hold on. Hold on. Why can't I do that? Hold on. I'm not even, not even because what you said is ridiculous, but Morgan, Josh looks ridiculous, but he's, his video is going to be fine when we, when we, uh, no, no, it's all like that. Both of you look terrible, but I look terrible too.

But yeah, I look ridiculous or that. Both of you look terrible. Oh, I look terrible too? It'll clean up. But yeah, I'm sure I do too. Hold on, I look ridiculous or the resolution is just not that good? No, the resolution, relax. Okay. I mean, that's, isn't that a better way of phrasing it? Right?

Well, I think you look handsome. So, how do you feel about it? All right, let's go. Hey, everybody. Hey, everybody. We are here with the one and only Morgan Housel. And we're going to talk about Morgan's new book. My name is Downtown Josh Brown. I'm here with Michael Batnick. As always, this is a special edition of The Compound and Friends, and we are so excited to have our

guest here. Let me give you guys a very quick background. If you've never heard of Morgan Housel, he is one of the greatest writers of our generation. Talks about finance, behavior, etc. He is a partner at the Collaborative Fund. His first book, The Psychology of Money, has sold over 4 million copies. Morgan just released his latest book, Same As Ever, a guide to what never changes. It is now a New York Times bestseller. I started reading it.

Michael finished it. Yeah, I started. It's amazing. No, not you. It's already a bestseller? Unbelievable. Of course it is. It's Morgan F***ing Housel.

What do you think is going to happen? Morgan, what is it like to be a celebrity? You're asking me, Josh? You're the one who paved the road for everybody. You're the million Twitter followers. Fine, but you're the one you're the one who paved the road for everybody you're the fine but you're the one with but you're the one with all the money hey uh do people treat you differently in your like real life because they're not maybe aware of like when they hear about how many books you've sold and how how big of a deal you are like do you get treated any differently than you did let's say three or four years ago or not really? No, I mean, no, I don't, I don't think I have any friends that I didn't meet,

you know, fewer than 10 years ago or something like that. And I think that's, that's one of the issues. There's this quote that I love from Matt Damon and I'm not making any like stop with any cameras. Matt Damon has this quote though. He said, the day that you become famous, you retard socially because everybody treats you differently. And I've thought about this particularly, like the best example is probably like the people who become famous as kids, Michael Jackson and those kinds of people. They've never experienced a real world in their entire life because they're surrounded by yes men, yes women, the people who just want to do anything for them and will never show them like what the real world is. Another, I read, I just

read this a couple of weeks ago. It was one of the Vanderbilt kids. This is like 150 years ago. One of the little princelings, the Vanderbilt heirs wanted to play soccer. He's like 10 years old. And so they got together like all the servants in his house and they're like, go play soccer. And it was this one little Vanderbilt kid

versus 10 servants. And you know where this is going. He like kicked their ass and he was like, I'm so good at soccer. So I think once people start treating you differently, that's all liability, that's all downside. And I think you want to push back against that at every avenue you can.

In business though, people are definitely treating you differently and they should. You are now at a level of accomplishment that most financial writers never achieve and never will. So when people ask you to appear at their event or, you know, do a, do a speaking engagement, like people definitely are treating you differently than they did when you were, you know, Morgan Housel, who has an awesome blog.

Like you have definitely moved up. No, no, no, no, Josh. They're treating, they're treating his agent differently. Ah, I see. That's, there are levels to this. I think that's what you're saying. No, I honestly,. They're treating his agent differently. Ah, I see. There are levels to this, I think is what you're saying. No, it honestly doesn't. It's also weird coming from you, Josh, because you know, Michael know, we've all been chasing you for 17 years trying to get to where you are. So for you to say that-

I think you're fine now. I think you're fine now. You wouldn't trade places with me. The other thing that's so important here, that's like probably the most important thing is to have a wife and kids who don't think you're any you're anything special you know you before that's right doesn't matter how many books you sell when my daughter's like i'm out of water get me water like nothing matters i i i agree i get the hey big shot now go take out the garbage

yeah exactly i'm glad but that's so i say say, do you understand that I was on Charlie Rose? She's like, yeah, but the garbage is still here. All right. All right. I wanted to get that out of the way. Listen, you deserve all of the fame and all of the accolades and all of the book sales because honestly, the writing that you're doing, and I'm going to let Michael get a word in edgewise after I say this.

The writing that you're doing is among the most helpful writing for all investors, professional, amateur. It doesn't matter where they sit, how long they've been doing this. The stuff that you're putting out, and I don't mean once, but routinely, is the stuff that helps us survive and cope and get through these moments where we think we're invincible or we think all is lost. That's the level of what you are doing. So you deserve everything that's come your way. And that's why we were so excited to talk to you about the new book.

Michael, why don't you take it from here so I can take a breath? Okay. So the book was incredible, as I know it would be. Congratulations, Morgan. Today we're recording, it is Monday, November 20th. And all anybody wants to talk about today, rightfully so, is the huge news that the board of OpenAI throughout the founder or co-founder, whatever. It's really an incredible story. And in your book, which is a guide to what never changes, you wrote, new technologies take years or decades for people to even notice.

And that definitely used to be the case. But isn't it interesting that we now live in a world where things get disseminated faster than ever and products come to market faster than ever. There's this chart that shows growth to a billion users and it's getting shorter and shorter and shorter, now culminating with open AI. It took them, I think, 47 minutes to get a billion users or whatever it is. So do you think that some of the lessons or experiences that we're having talking about this company are really different? Like what are some of the timeless things and what about today is really different than it ever happened?

I would push back a little bit on the idea that like products are coming to market faster because even something like AI, yes, chat GPT has been around for 11 months, but AI has been a thing for like 40 years. It's just now people are noticing it. That was the point of like all these things happen so slowly before they just explode onto the scene. It was the same, like the iPhone came out in 2007, but smartphones, bad ones, shitty ones have been around for decades before that. So I think a lot of this it's, it's kind of same as ever. Like it's all like all these technologies take forever to build up and then they kind of just burst onto the scene all at once. And you

can go back hundreds of years and that's really the same. I do think it's interesting. Like someone pointed out that if you go back 20 years ago or like the late nineties, early 2000s, it was when they were first introducing encryption onto the internet and people freaked out. It was like, this is going to be the easiest way to hide bad actors and for criminals to hide now that everything's encrypted, like forget about it. And of course, like that seems ridiculous now. And some, someone made this point into the doom and gloom AI, like it's all going to be Terminator.

It's going to ruin our lives. That kind of, that kind of vibe for new technology has been around forever too. It was the same with like, when the telephone came about, it was nobody's going to write letters anymore. And that's bad for society. And then when the internet came out, it was like, no one's going to talk on the phone anymore. And that's bad for society. And there was like, whenever there's a new technology, there's this yearning for the old way. And I think a lot of it is because you don't want to be told that the old way that you've been doing it for your entire life was wrong and inefficient. And there was a better way all along to do it. And now you have to reject everything you've done and try something new. So I think in a lot of ways, it's the same. I mean, what's going on in the last 48 hours,

of course, it changes every nine minutes. So like by the time people listen to this, who knows what's going to happen, but hard to think of a bigger board belly flop than what's happened to not, I mean, as I'm sure it's changed by the time this was published, but 700 of the 770 OpenAI employees have signed a letter saying they're going to leave. The entire company is walking out the door. And for the board to not-

I don't think that board's going to survive this, by the way, so- No, I'm sure by the time people listen to this, it'll be completely different to it. But it's astounding to take the most high profile CEO in probably the most important company in America and just, and, and, and just, and just ax them without thinking even one step ahead, let alone three or four steps ahead. I want to follow up on that really quickly. You sit on the board of a public company. Isn't this like job number one to make sure that whatever you're doing, the stakeholders are like going to be in solidarity with that somewhat?

Like, I don't think that there are any examples of public boards where in one fell swoop, they alienate the entirety of the shareholder base, the employees. I mean, this is is like this is not same as ever like this does not happen no no this is this is definitely rare who controls this board i think because it's a non because it's a non-profit that's kind of my question is who can who does the board answer to i don't know if i don't know the answer to that it's even though microsoft invent owns half the company microsoft owns half of the private company, which is a nonprofit. It's a totally different entity. The best advice I got when I joined the board of Markel was the board has three jobs,

hire the CEO, fire the CEO and pay the CEO. The board's job is not to run the company. It's not to get your fingers in there and be like, oh, you should be doing this differently. It's to make sure you have the right person on the job. And the huge majority of boards, no, not the huge majority, many boards don't take that seriously enough. When the company is obviously going in the wrong direction and performance has been terrible and strategy sucks and morale is terrible, they should be getting rid of management and bringing in people for doing anew. But if you talk to these board members, that's exactly what they think they just did. But if you talk to these board members, that's exactly what they think they just did.

They think that this particular CEO was headed in the wrong direction relative to the not-for-profit mission, not as it pertains to the for-profit part of the company was getting out of control, and the initial mission of OpenAI was to do this safely, and accelerating at the rate that he wanted to would have constituted an unsafe acceleration. So that's their rationale behind this is we are acting as a board in the interest of OpenAI, the not-for-profit that we are answerable to. But here's the nuance to that. You know that, and I know that because we've pieced it together from certain journalists. The board hasn't even announced that. The board just put out a vague statement saying he lost the trust and he was not being forthcoming in his communication. And then so immediately when that came out on Friday, everyone was like, oh, he clearly committed fraud or had an affair or the other things that you would do. And I know that's not the case. I thought it was a sex thing or like China was paying him.

I thought it was something like that. Yes, something like that. And so even if I can empathize with the board who has a duty to have the right person and then they felt like they didn't. I can empathize with that part. But the way that the communication was bungled to such an extraordinary degree is just astounding to watch. So Morgan, getting back to where this came from, it came from a chapter called Overnight Tragedies and Long-Term Miracles.

And in that chapter, you wrote, if we hadn't become better at treating heart disease and the mortality rate hadn't plateaued since the 1950s, 25 million more Americans would have died from heart disease over the last 65 years, which is, I mean, 25 million is a lot of people. The crazy part about that stat is though, the average annual decline in heart disease mortality from 1950 to 2014 was only 1.4% a year, which a lot of things in long-term certainly invest and come back to the idea of compounding. Even small numbers produce massive results over time. Yes. It's this idea that bad news usually happens very quickly. It's blunted in your face. It's like Pearl Harbor, 9-11, COVID. It's literally one second, everything's fine. And the next moment,

everything's gone to hell. Good news is almost always the opposite. It's like a slow compounding over time, which means you don't notice it. So one of the best news stories to happen to society in all of our lifetimes is the decline in heart disease mortality. It used to be for our parents' generation, if you got a heart attack, you're dead. Even if you make it to the ER, there's nothing they can do for you. If you have a heart attack, you're gone. And way more people had heart attacks because we had no blood pressure medicine. I mean, there's this crazy story about Franklin Roosevelt in 1945. Just before he died, his blood pressure was like 220 over 100. And there was nothing they could do for him. There was no blood pressure medicine. Of course, he died like a couple of weeks later from heart disease.

But so it's so much better now, but we don't pay any attention to it because it was a 1.4% improvement over 80 years. Now, if you understand compounding, anything that compounds even at 1% or 2% for 80 years turns into this ridiculous statistic, 25 million lives saved. But we never paid attention to it. There's never going to be a CNN headline that says, breaking news, heart disease mortality improves by 20 basis points. Nobody cares about that.

breaking news, heart disease mortality improves by 20 basis points. Nobody cares about that. So because of the speed difference between good news and bad news, most people's perception of how the world is doing is, I think, overly skewed towards pessimism because it happens, it's in your face. You can't look away from it. I have a slightly different take on that because I think there are moments where great news happens suddenly and it's right in our face. great news happens suddenly and it's right in our face. I remember being in seventh grade when the Berlin Wall fell. I knew nothing about geopolitics and World War II and the Cold War, but I knew based on the adults in my life and the TV coverage that instantly the world had changed for the better. And the 1990s ended up being, I think nobody would argue against this, one of the best decades of all time, just in terms of how people felt. It was like a lot of happiness.

I know bad things happen like Kosovo, but like in general. We got creed. We got creed though, the 90s. Yeah, we got creed. Come on. So there are those moments where like obvious good news happens all at once. I agree with you that they're more rare, but I think it's about us and not the news because as a survival mechanism, we react to negative news and we build really vivid memories instantly about when bad things have happened. And we do that as a species because our ancestors did

that. And that's why we're still here. So when we see a saber-toothed tiger, we react instantly. We probably have a more pronounced reaction to that than when we see a honeycomb that we can bring back to the cave and give everybody sweets. Like that's just, that's what nature, that's what happened in order for us to survive for the millions of years before we had stock market portfolios. So we are not built for this. We're predisposed to react with greater urgency to threats than opportunities. And of course, just evolution, you have to survive in order to get the opportunity. So one is way more important than the other. It's always been the case. But I think the speed in which these occur too, and the Berlin Wall is interesting. I would agree that that would be an example of good news happening quickly,

but you could also say that there was a multi-year buildup to that. And I think you can definitely say that in hindsight, at the time when that happened, I think a lot of people, particularly in politics and geopolitical circles, they were not celebrating. They were saying, holy shit, what happens now? And it was not obvious what was going to happen now. This country that has tens of thousands of nukes, and now we have no idea who's running them, what's going to happen now. I think for a lot of the world, it was a terrifying moment, even if in hindsight, of course, it was for the better. Yeah. Well, you know what? It was uncertainty no matter what. It might've been uncertainty in a potentially positive direction, but I think that's right.

Six years ago, I wrote a post called Grad improvements going noticed. And I took that from a Bill Gates quote. He said, headlines in a way are what mislead you because bad news is a headline and gradual improvements are not. So for every Berlin wall example, there are probably literally 10,000 to one. I actually, so I made, I made that chart reasons to sell. I tried to make a chart reasons to buy, like what, what, what events occurred over the last decade that you'd be like, oh, because of this good thing happening, I'm going to invest in the stock market or this company or this sector or whatever. And I was really hard pressed to come up with anything well here's the thing if you actually made a chart called reasons to buy and you are serious about it it would be like 9-11 lehman brothers covet those were the reasons in hindsight that's when you should have been

buying of course those were the reasons to do it and so yeah you would look like a troll mike if you if you wrote that you would look like you're absolutely trolling everyone. No, so on the chart, I put like Steve Jobs unveils the iPad. Like, sure, okay, Uber goes live in San Francisco. But it was hard. I guarantee you that when the iPad was revealed, there were a million blog posts saying like, this is the top, like pure hype, pure excitement. There was a Steve Ballmer from when he was CEO of Microsoft saying like, when the iPhone was released, and he said, 0% chance it ever gains any market share.

The other, you know, I've been investing for 20 years, Josh, probably a little bit more. There has never been a single moment in those 20 years when there wasn't 12 to 100 things to point at that were going wrong. There's never been a single moment where the market didn't look overvalued, when hyperinflation wasn't around the corner, when politics wasn't a mess, when margins weren't either too high or too low. There's always something. And during those 20 years, the market's up four and a half fold that I've been investing. And I think that's the standard story of investing.

There's always a dozen terrible things to point at. But then you look at over a long period, you're like, oh, it's actually pretty great the whole time. So when you write a book, a lot of people probably would ask you this. When you write a book called Same As Ever, and your mission is to point out, I know everything that you see looks like it's the first time it's ever happened or looks really aberrant, but actually there are some things that are never really changing and they're the more important things. Where do you start? Do you

start from the things that have truly changed forever? Or do you start out looking for examples of things that were true a hundred years ago and are still true today? Like what's the process behind coming up with the subject matter for the book? I don't know if I actually set out to find these, but I've always been interested in two broad topics, history and finance. And so a lot of that is just, I'm just reading a lot of like histories of businesses and biographies. I think I was always struck when you read a biography or a history book, that's talking about something a hundred or a thousand years ago. And you read it and you're like, this is exactly what's happening today. The details are different, but how they're reacting to things, nothing

changes whatsoever. And I've talked about, there was this book that I read called The Great Depression, A Diary, which is written by this Ohio bankruptcy attorney in the 1930s, where he's just talking about what's happening during the Great Depression. And he has this post in 1932, this diary entry, where he says, if you change the dates from 1932 to 1894, every single word would match up to what happened in 1894. But then when you're reading his posts about 1932, you're like, if you change these dates to 2008, every single word lines up. So then you're like, these things don't change. Obviously the financial crisis of 1894 was different from 2008, but the way people responded to it did not change at all.

And I think you see that all the time when you're reading about these things. When you're reading about history, sometimes the change is amazing. Like, oh, people used to do it that way. That's interesting. But more often, you're like, God, these people are thinking exactly the same way we think. With investing, today we spoke about open AI. People are always thinking about the next thing. It's this way with AI, and it was this way with the wheat stocks, and we spoke about open AI, people are always thinking about the next thing. It's this way with AI and it was this way with the weed stocks and we know how that ended.

But a lot of people, a lot of investors, Warren Buffett being a great example, focus on things that will never change. Could you tell the story about Warren Buffett going for a ride in a car and talking about the Snickers thing? I had lunch with this guy last summer and he's good friends with Buffett. And he told the story that he was driving around Omaha with Warren in 2009, like the wreckage of the financial crisis. And Omaha was a mess.

There were like stores out of business and whatnot. And this friend of mine said, God, like Warren, like how do we ever recover from this? Like the world's never gonna be the same after this. And Warren said, do you know what the best selling candy bar was in 1964? And the guy said, no. And Warren said, Snickers. And then Warren said, do you know what the best-selling candy bar is today? And the guy said, no. And he said, Snickers. And that was it. That was his answer to that question of like, look, you got to

find things that don't change over time. You can sit here and focus on how the world has changed, the new developments, the new bankruptcies, the new market crash, but just go out and find something that does not change and put all your weight in that. And he said his story was so powerful that there was no follow-up. After he said Snickers a second time, it was just like that's the mic drop story of find things that never change. And I think that's, I think it's, you know, when you look at the course of Buffett's life, he's been investing for 80 years now. He has changed a million things about how he invests, his strategy and whatnot. And if you read like, if you read the Intelligent Investor, which was first written in 1934 or something like that, 80% of it is not relevant to today, but 20% of it is things that don't change over time. It's like philosophy is about money. His strategy changed, but his philosophy hasn't.

I think that, I think even there are some philosophies that have changed. Like he's evolved and adapted, particularly going from the cigar butt Ben Grams to like buying good companies. And even if you look at Buffett in the last 30 years, or the last 10 years, he would not have invested in Apple 15 years ago. And now he's made more money on Apple

than any other investment in his life. I guess when I said philosophy, I was thinking like principles, for lack of a better word. Like if he had 10 philosophies for investing back in the 1950s, a lot of them are probably very much applicable today. I'd say without knowing what they would be, nine are probably exactly the same, even if you're adapting and evolving to all the new information. And I think that's a lot.

Like obviously, if you compare the US economy today a hundred years ago, you can list a million things that are completely different, but how people respond to it and behave isn't at all. There's this quote that I love from Nassim Taleb where he's talking about books. And he said, if you want to write a book that people will read 20 years from now, you have to write a book that people would have read 20 years ago. That's how you have to be thinking about it. Like find something that is going to be timeless and just focus on that. And I've always been astounded as a writer where it's so hard to get people to pay attention to your writing. When people write something that is time sensitive, like it's so hard for these things to work as it is, but then you put yourself into a time constrained box and

you're writing a book about like the best stocks for 2023. Like obviously that's complete. It's going to be completely outdated in two months. It's like buying a call option. You have a, you have a, you have an expiration on that, on that a contract. Like it's even if it's great, even if it's great writing. Hey, so there are things though that do change permanently and it's tough to know in the moment as things are evolving, is this one of those changes that we're going to look back and say, oh, it wasn't really a change same as ever? Or is there some fundamental shift where things will never be the same again? And then with semantics, we could say, oh, it's no different. But I was thinking about General

Motors last week and Ford and Toyota and the largest auto manufacturers. And for 100 years, it was same as ever. There were cycles. The economy got good. It got bad. But in the end, everybody needed to buy a car. This is a market that, in my view, is completely different.

The way we utilize cars, ride sharing, the way that the cars themselves are now built. They used to all be internal combustion engine and now they're battery operated. And it is not guaranteed that the automakers who lived for 100 years are going to live for the next 10 years. And in fact, their stock, their multiples on their stock prices tell you that there are some pretty substantial bets that they're not going to survive. They're selling at four times earnings. So like, how do you know when something like Tesla comes along with a battery powered car, how do you know that it's not same as ever? And that there is this true, like world rattling change now underway. true, like world rattling change now underway?

Like what's the tell? Yeah, I think the idea that everyone has always needed to buy a car, I would not put that in the same as ever category. In fact, there's such a long history of things that were so obvious everyone was gonna need forever, typewriters and whatever it would be that come and go. What is same as ever, that is in the chapter in the book is like how natural and whatever it would be that come and go. What is same as ever that is in that chapter in the book is like how natural and normal it is for your competitive advantage to die.

And how it's, it's not normal whatsoever for a company to dominate for a hundred years. And if there is one, like, like at a very broad level, how things are different today than they used to be is I think a lot of these trends evolve or are accentuated more than they used to be. So I'll give you an example, social comparison of like, I'm going to measure my wellbeing relative to though, to my friends and my neighbors and coworkers and whatnot. People have always done that, but it's way accentuated now because of social media. So the idea of comparing yourself to others is not new, but it's just like gasoline on the fire now of, and it's, it's getting,

it's getting worse by the day. Like the better the algorithm becomes, the less, the less great you feel about yourself when, when opening up Instagram and seeing how happy and beautiful everybody else is. So a lot of these things, even if they've been around forever, there's like the speed in which they can happen changes. And that's probably true for companies, competitive advantages of maybe it used to be that if you made it to the top of your industry, you could dominate for 30 years and maybe now it's six or whatever it would be. So even if the idea is the same, the speed in which these things happen can be totally different. GM2 is something like GM and Ford, all those big automakers, they've been struggling for a quarter of a century. A quarter of a century would be

like the average lifespan of a new industry. And that's just a period that they've been struggling for. So the fact that they've made it this long is pretty astounding in itself. That's interesting. That's a better way to frame it, I guess, is like the constant is losing your competitive advantage. Yeah, and I don't know which companies are gonna do this.

This is not a forecast, but you know that in 20 years, at least one of Google, Amazon, Netflix, NVIDIA, Apple are either not going to exist or they're going to be the equivalent of like JCPenney's. You have no idea which one, but I don't think there's ever been a period in which that's not the case. I remember this article.

How about this? I don't know that. I mean, I know it sounds naive to say that they're all going to be around in 20 years. It's like, read a history book. History says that none of these companies will be here in 20 years. What if it's different this time?

Well, of course it could happen. I don't know if I'd put that much emphasis. Of course, it's possible. But I think, I can't think of one 20-year period in which, let's say, the top 10 companies, however you want to measure it just by market cap in that period, stuck around. Of course, there are some examples. The best example of dominating for a very long period of time is Microsoft, which is a $2.5 trillion company that's almost 50 years old. The company's almost 50 years old, and it's going better today than it ever has in its history.

That's incredibly rare. That's not what you should bet on. But these are the exception. I think the FANG term came about in 2015. And I would bet money that by 2030, which would be a 15-year period, the FANG stocks are still going to be the dominant ones. And I don't know that there's been a group of companies that have dominated for a 15-year period. Maybe they are. Yeah. And just because you're not dominating anymore doesn't mean that you're out of business. Like if this was 1999 and we were talking about dominant companies, we would say Walmart, Dell, and Citigroup. Those companies are all still around.

They're just not the holy shit companies that they were 25 years ago. So I think there's a lot of these companies that Amazon, like all those big companies today, the FANG companies today, they might still be in were 25 years ago. So I think there's a lot of these companies that Amazon, like all those big companies today, the FANG companies today, they might still be in business 25 years from now, but the odds that they're going to be dominating to the extent that they are today is very low. And you can just state that without looking at any of the companies, just by saying in all of history, that's always been the case. One of the tricky things about thinking about things that will never change is that we are constantly force fed things that either are changing or the rapidity of which the news cycle happens. And we were talking about the media and a lot of people

like to like, uh, say that they're in it for clicks, which is obviously true, but they're giving us things that we will click. Like they're giving us what we want. If they weren't giving that to us, we wouldn't be clicking on it. And so you tweeted, and this is maybe a good way to sort of recalibrate where you want to pay attention or where you want your energy to go towards. You said a good test when reading the news is to consistently ask, will I still care about the story in a year, two years, five years? Yeah. And of course, there are some news stories for which the answer to that question is yes. If you're talking about what's happened in Israel and Gaza for the last couple of months, we will care about that in the future. So it's not that the answer is always no.

But if the news story was NVIDIA misses earnings by one penny, am I going to care about that a year? No, not whatsoever. Even if it's going to attract my attention today, I just think it's a really important filter for doing this. And I've always tried to do that as a writer by asking like, is this thing that I'm writing, is it going to be relevant in five years? And if the answer is no, why am I going to waste my time on something that's going to die? 10 years ago, I was a columnist at the Wall Street Journal and it was always the case. Every single piece that they wanted, they would be like, hey, good article, but how does this relate to this week's news? And I would always be like, it doesn't. Why would I want it to? I want the opposite. I want it to

be timeless. But they always said, no, it has to be tied back to something that occurred in the last 24 hours. And I always thought that was the craziest way to go about content. Yeah, but they're not Wikipedia. So Jerry Seinfeld tells the joke, isn't it funny how the newspaper is always the same amount of pages? Like there's a certain amount of need to pay the bills to get people to read things. And the fastest way a news organization gets people to read things is if they're urgent or seem urgent.

So maybe I understand why- You're not writing Wikipedia entries. You're writing like, what do I need to read? Why do, why do people need to read this right now? That's the job. But I, so I understand why it would happen, even if I thought it was wrong, but you could also push back and say the people who write timeless things, get the most clicks. Those are the people who get, who have the most loyal followings, who sell the most books, who have the biggest blogs. The three of us- How many Morgans are there? How many Morgan Housels are there?

This is true. Not a lot. There's really not that many. There's Morgan Housel and there's Pom. There's actually a sixth. I mean, that's really what you got. I don't, you know. But the three of us have spent our entire careers

almost always writing about things that are timeless. And it's worked for all three of us. And the three of us could have written about what the Dow did today. And that even if you're very good at it, there's, there's such a, there's such a, the, the clock is ticking on everything that you write. Yeah. I, I actually used to write a lot about what the market was doing every day and every week. And even when you did it though, you put it in broader context. That's what I try to do. I try to tie it back to something that was bigger than the news of the day. I agree with you. But then I just stopped entirely. And so I will have comments on what's

going on in the market day to day. We do podcasts, we do YouTube, we're giving people like, hey, this happened just now. And here's our take on it. But I don't write about that anymore because I feel like it's not a good use of my ability. If I'm going to write about something, I want to do what you do. I want to write about something that people are going to care about six months later, six years later. I don't want to write about something and put all that time and effort into the writing. And then three market days go by and it's like, who gives a shit anymore? So I'm a hundred percent with you on that train. There's a screenshot I love from, from years ago. I think it was from like CNN money

when that was a big website. And there was a big blaring headline that said Dow falls 600 points at the open. And above that was the ticker. And the ticker was the Dow was up like 300 points. It was like literally in the time that they published the headline, the market had swung by 900 points. And you're just like, and just imagine if you're a business journalist writing about open AI today.

If you publish an article, nine seconds later, the whole thing is going to be irrelevant. Yeah, you have to keep, you have to write it in real time. You have to keep updating it. I agree. You have to live,

basically you could live blog it or you could wait three days. But the problem with waiting three days is that your competitors will all have articles up that people are clicking on and reading and seeing the ads next to. And that's what you're up against. You almost have to choose. So I think if you're not a journalist, which none of the three of us are, the better thing to do is to just opt out of speed and double down on meaning. And I know a lot of journalists who would love to do that also. That's not the job they're being paid to do. Yeah. It's a tough balance. So tell us what one of the more surprising things about doing the book, the reaction to the book or what got included in it

that you didn't think would at the outset. Um, tell us about like kind of the behind the scenes being an author of something like this. I was so like, I, I, I've been blogging, uh, full time for 17 years during that period. Just like the two of you, you come up with tons of material and stories. You just have this giant catalog. Josh is bigger than the ones that Michael and I have. So within that, you can look at just, okay, I've written, these are the 4,000 blog posts I've written. What are some of the trends? And like, oh, like can I find 20 posts that I really liked and use that as a springboard for a chapter? So my first book, Psychology of Money was the same. It's just like, we find 20 blog posts that did really well and then use that as an idea, as a skeleton to turn that into a chapter from there.

That's really what it's been. And to me, it's not only the most efficient- So would you say this book is your second best 20 stories? Oh, geez. That's tough. Maybe. But I think it's not only the most efficient, I think it's the best way to write a book because the material, the ideas can be tested in a way rather than, because I don't know if it's the same for you guys, but even after blogging for 17 years, I don't know what's going to work. I'll write a post and I'm like, oh, this is great. And it's a total flop and vice versa. Sometimes I'm embarrassed to publish it. And that's what does the best. It's really hard to understand what's going to do well before it's out there. So if you can test a lot of the material, this is something that Taleb does as

well. Like all of his ideas from Black Swan and his other books, like it had been tested in a blog beforehand to get the idea. And then you can craft it from there to turn it into a chapter. Morgan, you've been blogging for 17 years. You started podcasting, I don't know, six months ago or so. How's that been? What's different about speaking versus writing? I think obviously it's more of a, speaking is more of a performance just because the tone and your inflection and the speed in which you're speaking is all something where in a blog, there's none of that. It doesn't matter whatsoever. What's astounded me that I know you guys will relate to because you're big podcasters too. The podcast I've been working on for six months is already bigger than the blog that I've been working on for 17 years because the audience- Don't tell anybody that.

The potential, the number of people who want to learn with their ears is so much bigger than people who want to learn with their eyes. And I didn't realize that. Patrick O'Shaughnessy tried to explain that to you. And at first you were resistant to that idea. I didn't believe it because I'm not that much of a podcaster. I'll listen to them on the planes, but most, most of the time I read and that's how I want it. And I think I implicitly assumed that everyone else was the same and it's not true at all. So it's, it's cool to, to have a, I think that that's one of the main reasons I'm doing it. I mean it's fun. It's just a different medium.

But you got to go where the people want to learn and like where they're willing to get it at. And so that's been the shock. So next, you're going to take your talents to the blockchain? It's all going to be on the blockchain, right. Do you think that investors who are coming across these ideas for the first time and had not been blog readers per se, but they hear you explain it, don't you think that they probably absorb it better as an audio product than they would if they just read you for the first time? I have different thoughts on this. Because I listen to you and I feel like if I were like not sophisticated and never really read about investing, but I heard you speak, I would like, I feel like if I'm in the shoes of that audience discovering you for the first time, audio is almost a better introduction. Even though you're a great writer, like we all know you're a great writer. I'm talking about for somebody that's coming across your material for the first time. I think for most people, the answer is yes.

For me, it would be no. And back because I am a reader more than a listener for podcasts. And maybe this is dumb, but I think it's easier to hit pause with your eyes than it is to actually hit pause on your podcast or on your audio book. So I think when you're reading on your own, you can go at your own pace. Whereas in a podcast or audio books, it's easier to get lost and to be like, I don't, I don't know if this guy's talking about it anymore. And so that's what it is for me. There's plenty of times when it's like, oh, I need to reread that paragraph. It's easier to reread a paragraph than it is to hit the back 30 seconds button and, and, and redo

something. So people are different. But I think the majority of people who are listening to audiobooks and listening to podcasts wouldn't be getting any of it. It's not like if the podcast didn't exist, then they would find the time for books. I think with the explosion of audiobooks and podcasts, you just have more learners. It's just increased the entire pie. It's not a rearrangement of how people are getting their information. It's just more people are getting information today than there were 20 years ago, which is great. I think that's a really optimistic way of thinking about it. It's not like people stopped reading, the readers are reading, and then all these other people that would never have read are coming to these ideas in a different

format that they prefer. And you can quantify that because like the audio book market has exploded. It's just like ridiculous growth, but the audio book market has exploded. It's just like ridiculous growth. But the physical book market is as good as it's ever been. It's not like it took market share away from that. It didn't cannibalize it. It's just increasing the size of the pie, which is great. What's your year-end S&P 500 target and why?

I don't know if I told you guys this story, but this was like 10 years ago. I was going on a radio. I've heard the story. I was going on a radio and they said, by the way, we're going to ask you your year end Dow target. And I said, I'm sorry, I don't do that. And they said, oh, well, we have five minutes before we go live. So you can come up with one. Like you have five minutes to figure out this $100 trillion market, just like go figure it out in five minutes. But I think that it was a perfect summary of how a lot of financial media works.

But that's giving the audience what they want to hear. I heard a NFL sideline reporter and you know how during halftime, they'll come out and they'll say, I spoke to the coach and he said, we got to tighten up the penalties. We got to be more disciplined. We got to stop the run. And she said, oftentimes I just made that up because the coach

didn't want to talk to me, but I'm telling, you know, I'm basically giving the audience what they want. People did not like that. Other sideline reporters got really pissed off having somebody say that out loud. And you know, that exists in financial media. Of course it does. And when you hear someone talk like that with an idea that they literally made up 19 seconds before and they're saying it very eloquently and they're well-dressed and whatnot, it's easy to take that seriously. Now, of course, the good people in financial media stick out and earn their trust over time. But there's a big portion of that as well.

Do you think that same as ever and the psychology of money, do you think that this is just the beginning of a series of books that like will be the kind of thing that people start to build their libraries with? Because I have to be honest, when I started in the business, anyone that started in my industry in the mid to late 1990s was given like the same books to read. And when I meet people today of my generation and I ask like, when did you start in that? When did you start in the business? Whether they were a trader or a stockbroker or an investment banker. I say like, what were the first books that you read? They all read the same books as me. Cause, and this is like almost pre-internet, like, like really it is pre-internet. So these

were just like the books that you were told when you started in the industry, like, this is what you read. I think that every generation has a version of that. And like, maybe the people who started in the industry 10 years ago, they were all given Kahneman. Then like people were like, oh yeah, we'd thinking fast and slow. Well, why? I don't know. Just everyone's reading it. Just read it. Right. Like, I, I feel't know. Just everyone's reading it. Just read it. Right. Like, I feel like there's always that group of books for every generation. So for my generation, it was like a mix of motivational stuff, like The Richest Man in

Babylon and, you know. Peter Lynch. Yeah. And then, thank God, somebody slipped in, like Nick Murray, for me, was the book that changed my life. But I feel like there are people that are starting either as investors or professionals working in the industry and they're being handed your books. And these are the books that they're telling other people they have to read. Like that becomes a thing.

I feel like you could go on a run now where as long as you, in a reasonable period of time, have the next one ready and the next one ready- No pressure, Morgan. No pressure, but you could be like the bookshelf for this generation. I mean, it's happening anyway. Well, first, thank you. And there's two different ways that I've seen this play out. There are some books that have been selling at ridiculous levels for 25 years. Two that come to mind are 48 Laws of Power, which I think was published in 1998, and it still sells millions of copies every year. Rich Dad, Poor Dad is another. I think it was published in the late 90s too. It sells a zillion copies every year. So they have like the long tail on those is

extraordinary. It's literally an entire generation. There's also books, I'm not going to name them because I don't want to say bad things about any author, but books that at one point in time sold millions and millions of copies and then just stopped. Just out of the middle of nowhere, it just stopped. Some of those, if you look back, it's like, well, that was kind of timely given the era in which it came out. But sometimes I think it just kind of saturates its target audience and then it's done. So there's two. And if I look at that book that I'm describing versus like 48 Laws of Power, it's hard to describe what the difference is. Why did 48 Laws of Power continue and this other book just stopped? I don't know if I can

piece it together. So I think it's very hard. It's very hard to predict book sales in any sense, even if it has a ton of momentum. You can even look at the Harry Potter books. The biggest selling books of our generation don't sell nearly as well today as they did 15 or 20 years ago. At some point, you saturate your market and things fall apart. Well, let's hope that doesn't happen for a long time to come. We are obviously friends of yours, but also huge fans of your work. And the new book, same as ever, just loaded with amazing stories, great insights, great takeaways. Obviously, anyone that asked me, what should I be reading this fall? That's the book. And hopefully, you're already thinking

about how to get the new one out. But I just want to thank you for hanging with us today. We asked you last minute. We really wanted to make sure we promoted the book and we got you in the mix. So thanks for doing this. And anything you want to say to the audience in closing, any compliments you want to give to either Michael or myself, you tell us how you, how do you want to end this? Both of you are in the acknowledgements of psychology money because of the impact you've had on me in my career. But Morgan, both of us didn't also make the acknowledgments the same as ever. Not to brag. So go f*** yourself.

No, you're both in there. I'm pretty sure you're both in there. Damn it. Michael, we don't have to be in there because it's same as ever. So we were in the other one. You know what I mean? It's unspoken. It's implied.

It's implied. He still likes us. All right. Morgan, we love you. Thanks so much for being a part of this. Everybody go out and get your copy of Same As Ever from Morgan Housel. You're going to love it.

You're going to want to buy extra copies as gifts. We recommend you do that too. Happy Thanksgiving. We'll talk to you all soon. All right. So Morgan, that was the warmup. Just stick around. We're going to do the whole thing again,

but I want you to like really be into it this time. Okay. Yeah. Loosen up. Loosen up.