A guest essay from Morgan Housel... Be careful what you put in your attic... Expiring and permanent knowledge... The value of Charles Darwin's 'extreme objectivity'... Hear more great ideas at our Stansberry Research conference...
Editor's note: Today, to continue our "late-summer series," I (Corey McLaughlin) am thrilled to share with you a guest essay from one of my favorite financial writers, Morgan Housel. He will be speaking at our annual Stansberry Research conference in October.
You may know Morgan as the author of The Psychology of Money, his 2020 book that has sold more than 3 million copies and been translated into 53 languages. The book features a collection of timeless investing advice of the kind he also writes on his blog for Collaborative Fund Management, an investment firm where he is a partner.
I've been reading Morgan's work for years, so when I found out he was going to be presenting at our conference this year in Las Vegas, it was the perfect excuse to get in touch. He gave his blessing for us to share one of his recent pieces here in the Digest. Enjoy this one, originally published in May...
(And at the end of the essay, you'll also find details on how you can hear more from Morgan at our upcoming Stansberry Research conference – our biggest event of the year – either in person this October in Las Vegas or via our livestream broadcast.)
Sherlock Holmes says in the book, A Study in Scarlet...
I consider that a man's brain originally is like a little empty attic, and you have to stock it with such furniture as you choose. A fool takes in all the lumber of every sort that he comes across, so that the knowledge which might be useful to him gets crowded out, or at best is jumbled up with a lot of other things so that he has a difficulty in laying his hands.
This was written in 1887. Imagine how he'd feel today – phone buzzing in his pocket, social media feeds gushing out useless information.
Deciding what to pay attention to is hard, overlooked, and most important, it's a negative skill – it's about what you willfully ignore as much as what you actively seek out.
Francis Crick, who discovered the double helix structure of DNA, was once asked what it takes to win the Nobel Prize. He responded: "Oh it's very simple. My secret had been I know what to ignore."
Author John Barry writes:
Einstein reportedly once said that his own major scientific talent was his ability to look at an enormous number of experiments and journal articles, select the very few that were both correct and important, ignore the rest, and build a theory on the right ones.
The best reading strategy I've come across is the idea of a wide funnel and tight filter. Be willing to read anything that looks even a little interesting, but abandon it quickly and without mercy if it's not working for you.
Be choosy about what you let into your attic.
A few other things I've found helpful in choosing what to pay attention to:
When reading an article, book, or report, ask, 'Will I still care about this in a year?'...
Five years? Ten?
Most of the time you'll realize you won't care about whatever you're reading in a week. It's newsy – maybe it's interesting, but it has an expiration date.
There are two types of knowledge: Expiring and permanent.
Expiring knowledge is things like quarterly earnings, election polls, market information, and politics. It catches more attention than it should, for two reasons. One, there's a lot of it, eager to capture our short attention spans. Two, we chase it down, anxious to squeeze out insight before it loses relevance.
Permanent knowledge tends to be principles and frameworks that help you make sense of expiring information.
I read newspapers and books every day. I cannot recall one thing I read in a newspaper from, say, 2011. But I can tell you details about a few great books I read in 2011 and how they changed how I think. I'll remember them forever. I'll keep reading newspapers. But if I read more books I'd probably develop better filters and frameworks that would help me make better sense of the news.
Asking how long you'll care about the information you read pushes you to focus on permanent things and care little about temporary things – a great mindset for long-term thinking.
Memorize stories, highlight facts, skip the fluff...
There's a line I love: People don't remember books; they remember sentences.
More specifically, they remember stories.
Even in the best book you've ever read, what do you remember? A couple sentences, a few stories. Those sentences and stories might change your life, but they're all you'll take away from a book.
I try to remember that when reading. For nearly every blog post and most non-fiction books: there is no need to devour and focus on every word. If I can remember a few great stories and epic lines, it's a win.
Too many readers get too bogged down in details they're never going to remember anyways, when they could have pulled a few memorable lines out of a book and moved onto the next.
Pay close attention when someone you admire disagrees on a topic you're passionate about...
Charles Darwin, according to Charlie Munger, wasn't exceptionally bright, but became a first-class scientist because he spent his life trying to prove himself wrong. "One of the great things to learn from Darwin is the value of extreme objectivity," Munger once said. "He tried to disconfirm his ideas as soon as he got 'em. He quickly wrote down in his notebook anything that disconfirmed a much-loved idea."
That is an amazing trick, and for most people the way to disconfirm your own beliefs is paying attention to people who disagree with you.
But that's hard, because it's so easy to assume those who disagree with you aren't as smart or informed as you are. A lot of good ideas are ignored, or intentionally rejected, because they are said by people you don't admire.
If you're not blessed with perfect empathy, the trick to opening your mind to viewpoints you disagree with is to find people whose views on one topic you respect – that checks the box in your head that says "this person isn't crazy" – and listen to them about topics you disagree on.
When those two things align – a person you admire disagrees with you about something fundamental – pay close attention. There's a good chance this is information you'll want stored in your head.
Join Us in Las Vegas!
Do you have your ticket yet for the upcoming Stansberry Research Conference & Alliance Meeting? It's a gathering of some of the brightest minds in financial research and beyond... It's also a heck of a lot of fun!
During this year's event, you'll hear from your favorite Stansberry Research editors – like Dr. David "Doc" Eifrig, Dan Ferris, Eric Wade, Greg Diamond, and others. And, of course, we also welcome special guests from outside our business. In addition to Morgan Housel, our 2023 all-star lineup includes Josh Brown, Danielle DiMartino Booth, Ben Mezrich, Meb Faber, and many more.
Tickets are already selling fast! And it's no wonder... We give away so many new, actionable recommendations live on stage – it really pays to be there.
There's also a livestream ticket option if you can't make the trip to Las Vegas this year... You'll get access to the same fantastic conference content from the comfort of your own living room.
Click here for all the details and to reserve your ticket today.
New 52-week highs (as of 8/22/23): Cameco (CCJ), Eli Lilly (LLY), Option Care Health (OPCH), and Sprott Physical Uranium Trust (U.U-TO).
A quiet day in the mailbag… Surely someone has a complaint, criticism, or quip at our expense. Let us know at feedback@stansberryresearch.com.
Morgan Housel
August 23, 2023