On Morgan Housel
Who?
Have you ever read an article so good, you couldn’t wait to share it? Have you ever found a writer who publishes that type of article every week? Well here you go.
Morgan Housel is a partner at Collaborative Fund, a venture capital firm focused on the intersection of personal good and common good. A big part of his job is pondering big ideas, then weaving them into a narrative and publishing them. Housel previously worked for The Motley Fool and The Wall Street Journal. I won’t bore you with his writing awards - but he has a lot of them.
Why Should I Care?
“The most powerful concepts are those that span multiple disciplines.” - Morgan Housel
Morgan Housel combines history, behavioral finance, investing, and storytelling to share timeless and broadly applicable life lessons. His writing will help you become a better decision maker, investor, parent, and citizen.
There is neither a person whose articles I enjoy more, nor who has influenced my thinking so profoundly. Every minute spent with his content is an investment in the person you want to become.
Best Articles
Picking the top five Morgan Housel articles is like putting colors in chronological order - you can’t. So I selected some of my favorites. They cover a range of topics and will give you a good introduction. They’re sorted from shortest to longest.
Financial Advice For My New Daughter - These are good lessons to teach your children. But first, they’re good to remember yourself. This article is less about money and more about good principles by which to live your life.
Degrees of Confidence - If you’re an accountant and somebody asks you a tax question, your answer will likely be some version of, “it depends.” But if that same person asks you about a new diet, you’ll feel qualified to give a definite opinion. This is what Housel calls Level One Confidence - where “you believe that intelligence in one field justifies expertise in another.” Housel’s explanation of all 14 levels of confidence will help you understand the flaws in your thinking.
The Advantage of Being A Little Underemployed - Amos Tversky once said, “The secret to doing good research is always to be a little underemployed. You waste years by not being able to waste hours.” The 5 day, 40 hour work week was designed nearly 100 years ago for railroad workers. In this article, Housel explains why we need to rethink the way we approach work in the 21st century.
The Three Sides of Risk - This is the story of how two of Housel’s closest friends were killed in an avalanche, how he was spared by luck, and what it taught him about life and investing.
How this All Happened - This is the story of how income, consumption, debt, and disparity changed from the Great Depression to today. The biggest takeaway is that expectations move slower than reality. This piece will shape your perspective on where we are today.
The Psychology of Money - In one of his many interviews, Housel said, “So much of what matters in investing over the long term is not what you know, it's how you behave.” This article explains how your brain thinks about money. It also explains how you should behave financially.
Best Audio/Video
Morgan Housel has something insightful to say in each of his interviews. Whichever one you pick, you can’t go wrong. But these are some of my favorites and a good place to start:
What Other Industries Teach Us About Investing - Housel delivered this presentation in early 2018. It’s one of the best YouTube videos I’ve ever watched. The lessons from other industries that he applies to investing are lessons we can apply to many areas of life. Some important points:
The only thing you can control over time is your own behavior. Luckily, your own behavior is the one thing that makes the biggest difference.
The Wright brothers were the poorest and least qualified people trying to build a flying machine. They succeeded because they had the most patience.
“It’s likely more Americans died in 2002 trying to avoid terrorist attacks than died in 2001 from terrorist attacks.” In trying to avoid risk, you’ll commonly face a bigger risk than the one you were trying to avoid.
Standard Deviations Podcast - The Psychology of Money - This conversation touches on many of the topics in the articles mentioned above. They discuss how much of Housel’s work wouldn’t look like work to an outside observer (or even his wife). They also talk about how the more you learn, the less confident you become. Case in point:
"Most confidence in investing peaks a year or two after college." I’ve experienced this comment firsthand.
Invest Like the Best Podcast - This episode was great because it included both Morgan Housel and Jason Zweig, the two best writers in finance.
The Knowledge Project Podcast - Shane Parrish and Morgan Housel discuss career progression, biases and changing your mind, the best teachers, good writing, book recommendations, and parenting.
North Star Podcast - A wide ranging conversation that focuses less on investing and more on useful life lessons. My favorite quote from the episode: “Read more books and fewer articles. Read more history and fewer forecasts.”
Odds and Ends
When a person influences you deeply, it’s helpful to read the books that person found most influential. This is Morgan Housel’s list of 23 books that changed his life. I’ve only read two so far (When Breath Becomes Air and 30 Lessons For Living), but they were both impactful.
I hope you find Morgan Housel’s work as interesting and influential as I have. Send me an email if you ever want to discuss.
