Morgan Housel speech (and transcript) from MCC

[Liberty]

I thought it was quite a good speech:

 

https://microcapclub.com/2018/01/morgan-housel-industries-teach-us-investing/

 

Trancsript is here:

 

https://microcapclub.com/wp-content/uploads/2018/01/Morgan-Housel-on-What-Other-Industries-Teach-Us-About-Investing.pdf

[Jurgis]

I think you're duplicating yourself: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/morgan-housel-on-what-other-industries-teach-us-about-investing/msg322081/#msg322081  8)

 

 

[Liberty]

I think you're duplicating yourself: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/morgan-housel-on-what-other-industries-teach-us-about-investing/msg322081/#msg322081  8)

 

Too much of a good thing can be wonderful.

[Liberty]

Good essay by Morgan Housel about risk:

 

https://www.collaborativefund.com/blog/nobody-planned-this-nobody-expected-it/

 

Search the New York Times’ archives, and you’ll find that the word “unprecedented” has been published once for about every ten instances of the word “common.” Which is a lot. Stanford professor Scott Sagan nailed this when he said, “Things that have never happened before happen all the time.”

[Guest cherzeca]

thanks for posting (again)

[Foreign Tuffett]

Good essay by Morgan Housel about risk:

 

https://www.collaborativefund.com/blog/nobody-planned-this-nobody-expected-it/

 

Search the New York Times’ archives, and you’ll find that the word “unprecedented” has been published once for about every ten instances of the word “common.” Which is a lot. Stanford professor Scott Sagan nailed this when he said, “Things that have never happened before happen all the time.”

 

This Malcolm Gladwell style horse**** drives me insane. The story about the 22nd Panzer Division, while not untrue, is very misleading. The real "point" of the full story is basically the opposite of what he is trying to say.

 

1) It was really, really cold

2) 22nd Panzer Division was suffering from a severe shortage of fuel. This is why its tanks were sitting for an extended period of time without even so much as being started, despite the weather.

3) The crewman used straw in an attempt to insulate their immobilized vehicles

4) Mice like straw

5) When Soviets attacked and things fell apart at the front, the unit was able to procure enough fuel to launch a desperate counter attack. This is when it was realized the mice had chewed through various wires.

 

It wasn't just the 22nd Panzer Division that was short of fuel that Winter. The entire German army in Russia was short of fuel, something that Wehrmacht planners had consistently predicted would occur prior to the invasion. The real point of the story is that the planners were right: Germany had inadequate resources to invade the Soviet Union.

 

Other gross inaccuracies:

1) "The Germans had the most sophisticated equipment in the world." Actually the 22nd Panzer Division was equipped with obsolete tanks. The Soviet T-34s it faced were far superior machines.

2) The tanks weren't "destroyed" by mice, not were the Germans "defeated" by them. The entire incident had only a minor, if not completely negligible, effect on the outcome of the battle.

 

[Jurgis]

This Malcolm Gladwell style horse**** drives me insane.

 

Buuttt it reads good....  ;D

 

I know what you mean. I did not know facts about this particular story, but I've had other situations where my reaction was similar to yours. People present causal relationships and "explanations" as if 100% proven even if they don't have all facts or the situation is more complicated and/or if all the relevant info is not known or taken into account. But hey, it's the stories that sell or make a person writing them feel good/like an expert.

 

Thanks for your post.

[Guest cherzeca]

I thought Housel's main point, that the future can be surprising and impossible to plan comprehensively for, is a good one.  dont understand the complaint.

 

as for mice, well if the ignition wires were chewed up by mice, then it was the mice (even if there was a shortage of gasoline).  who cares if the germans put hay around the tanks as insulation.  the point was there was a single point of weakness in the tanks, and who would ever have been able to predict that it was the ignition wires being chewed up?

[Jurgis]

The point is that even if Germans made the wires mouse-safe, they would still have had no gas to run the tanks... And if they had the gas, mice would not have been an issue. So focusing on minor gotcha obscures the actual big failure. Maybe the point of the story should have been: figure out the real big issue instead of focusing on a possibly minor thing that obscures the big issue.

 

Like he says in the essay:

 

Water pipes broke, flooding and ruining a company’s office.

 

Is that the real issue? Or is the issue that the company did not save/backup their stuff and now they have to recreate the work of last X months?

If it's the latter, then focusing on water pipes is bad approach since the real issue is having full offsite backups and that's what needs to be dealt with.

 

Edit: in other words, although “Things that have never happened before happen all the time.” and you cannot expect them, maybe you should prepare adequately for things that happen all the time. Like bad supply chains or inadequate backups.  8)

 

Edit 2: Although "A founder had a mental breakdown" might be unexpectable  ::), this belongs to a class of startup employee related problems that are very common and happen all the time: a founder is an ass and can't work with others; a founder cannot lead for crap; a founder cannot work with co-founder; a founder cannot fire his friend; a founder cannot stop hiring his friends; etc. Or even if you narrow it down: "A founder had a burn out; A founder had a health issue". Might be a better way to look at these in toto. Although I can't say that they are easily solvable even if you treat them as quite likely to happen...  :-\

[Foreign Tuffett]

I thought Housel's main point, that the future can be surprising and impossible to plan comprehensively for, is a good one.  dont understand the complaint.

 

as for mice, well if the ignition wires were chewed up by mice, then it was the mice (even if there was a shortage of gasoline).  who cares if the germans put hay around the tanks as insulation.  the point was there was a single point of weakness in the tanks, and who would ever have been able to predict that it was the ignition wires being chewed up?

 

Open your mouth please, I am going to spoon feed this to you:

 

Housel's point: The Germans never could have predicted those pesky mice! It's a Black Swan!

 

My point: The real problem is that there was a lack of fuel, an issue German planners had predicted would occur (Google Georg Thomas). If there had been sufficient fuel, the tanks wouldn't have been immobilized and covered in hay for an extended period of time in below zero weather.

 

Hopefully now you get my point. When historians look back at Stalingrad they don't talk about mice, they talk about how the German army had stretched past the limits of its logistical and operational capacities.

[Guest cherzeca]

@ft

 

you are a real winner, aren't you?

 

and when the gasoline came and they turned the ignition on, guess what?

 

blocked

[Liberty]

So you're saying there were many problems, some quite obvious (lack of fuel, cold weather), which led to another less obvious one (wires eaten by mice)...

 

It's almost as if Housel used only one small part of a much larger and more complex story to quickly illustrate a point because his real point was about the nature of forecasting risk rather than about writing a book-length chapter about a specific WWII battle. Welllookathat...

 

I mean, I get you're a history buff and these types of reductionist anecdotes grind your gears, but you're the one missing the forest for the trees here. I think you could've added the detail you've added as a "here's the rest of the story, isn't it cool and more complex than it seems" rather than attack Housel and claim that it somehow invalidates his broader points.

[Foreign Tuffett]

So you're saying there were many problems, some quite obvious (lack of fuel, cold weather), which led to another less obvious one (wires eaten by mice)...

 

It's almost as if Housel used only one small part of a much larger and more complex story to quickly illustrate a point because his real point was about the nature of forecasting risk rather than about writing a book-length chapter about a specific WWII battle. Welllookathat...

 

I mean, I get you're a history buff and these types of reductionist anecdotes grind your gears, but you're the one missing the forest for the trees here. I think you could've added the detail you've added as a "here's the rest of the story, isn't it cool and more complex than it seems" rather than attack Housel and claim that it somehow invalidates his broader points.

 

I stand behind my two previous posts in this thread. Unless someone actually posts something of substance I'm probably done here.

[Xerxes]

Finish reading his book. Good fast read.

 

The Psychology of Money: Timeless lessons on wealth, greed, and happiness: Housel, Morgan: 9780857197689: Books - Amazon.ca