“Beginning in the mid-2000s, the momentum toward an increasingly open and liberal world order began to falter, then went into reverse. This shift coincided with two financial crises, the first originating in the U.S. subprime market in 2008 that led to the subsequent Great Recession, and the second emerging over the threat to the euro and the European Union posed by Greece’s insolvency. In both cases, elite policies produced huge recessions, high levels of unemployment, and falling incomes for millions of ordinary workers around the world. Since the United States and the EU were the leading exemplars, these crises damaged the reputation of liberal democracy as a whole.”

Excerpt From: Francis Fukuyama. “Identity.”

“Mark Zuckerberg’s three greatest fears, according to a former senior Facebook executive, were that the site would be hacked, that his employees would be physically hurt, and that regulators would one day break up his social network.”

Excerpt From: Sheera Frenkel. “An Ugly Truth: Inside Facebook’s Battle for Domination.”

Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works. So equally smart people can disagree about how and why recessions happen, how you should invest your money, what you should prioritize, how much risk you should take, and so on.”

Excerpt From: Morgan Housel. “The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.”

“In my nearly fifty years of experience in Wall Street I’ve found that I know less and less about what the stock market is going to do but I know more and more about what investors ought to do; and that’s a pretty vital change in attitude.
—Benjamin Graham”

Excerpt From: Michael Batnick. “Big Mistakes.”

The currently prevailing paradigm, namely that financial markets tend towards equilibrium, is both false and misleading; our current troubles can be largely attributed to the fact that the international financial system has been developed on the basis of that paradigm. The new paradigm I am proposing differs from the old one in two important respects. First, I contend that financial markets never reflect the underlying reality accurately; they always distort it in some way or another and the distortions find expression in market prices. Second, those distortions can, occasionally, find ways to affect the fundamentals that market prices are supposed to reflect.

Soros, George. The Crash of 2008 and What it Means: The New Paradigm for Financial Markets . PublicAffairs.

“There’s been more than two hundred studies on this idea since then, and they’ve all found the same thing. Willpower isn’t just a skill. It’s a muscle, like the muscles in your arms or legs, and it gets tired as it works harder, so there’s less power left over for other things. If you want to do something that requires willpower—like going for a run after work—you have to conserve your willpower muscle during the day,” Muraven told me. “If you use it up too early on tedious tasks like writing emails or filling out complicated and boring expense forms, all the strength will be gone by the time you get home.”

Duhigg, Charles. The Power of Habit (p. 137). Random House.

“A typical European car is parked 92% of the time. It spends 1/5th of its driving time looking for parking. Its 5 seats only move 1.5 people. 86% of its fuel never reaches the wheels, & most of the energy that does, moves the car, not people. Sound efficient?”

Tweet by Brent Toderian @BrentToderian 19 July’21

Models fail for three main reasons: the logic fails to capture what actually goes on in people’s heads when they make choices; the information going into the model is wrong—garbage in, garbage out; or something outside the frame of reference of the model occurs to alter the situation, throwing it off course.

de Mesquita, Bruce Bueno. Prediction (p. 124). Random House.

Nash defined a game’s equilibrium as the planned choice of actions—the strategy—of each player, requiring that the plan of action is designed so that no player has any incentive to take an action not included in the strategy. For instance, people won’t cooperate or coordinate with each other unless it is in their individual interest. No one in the game-theory world willingly takes a personal hit just to help someone else out. That means we all need to think about what others would do if we changed our plan of action. We need to sort out the “what ifs” that confront us.

de Mesquita, Bruce Bueno. Prediction (p. 34). Random House

Prediction with game theory requires learning how to think strategically about other people’s problems the way you think about your own, and it means empathizing with how others think about the same problems.

de Mesquita, Bruce Bueno. Prediction . Random House.