(Photo by Nick Fewings on Unsplash)
Since I’ve become rather well known for my maxims, it’s only fitting that the first post on this new version of my blog be a complete listing of them to date.
Whatever successes is I’ve had in life have come from following the below maxims. And whatever failures I’ve had have come from ignoring them.
Few of them are original to me. Everything I’ve learned, I’ve learned from someone else—my amazing parents, Nassim Taleb, Steve Jobs, Ray Kurzweil, Peter Thiel, Brene Brown. I’m forgetting so many others, so please forgive the oversight.
With that said, here are the maxims:
RISK MANAGEMENT AND DECISION MAKING
Always be right when it matters. It matters most when being wrong is potentially catastrophic. For instance, never allow yourself to mistake a bear for a rock.
The price of being right when it matters is frequently being wrong when it doesn’t (i.e., often mistaking rocks for bears). Forgive yourself these harmless errors and ignore those who would shame you for them.
Never make decisions based on how likely something is to work but rather based on the cost of it *not* working. When the cost of failure is great, high odds of success are irrelevant. Do not proceed. But when the cost of failure is low, low odds of success are irrelevant. So leap!
Never risk a lot for a little. Whether something is “a lot” or “a little” depends not upon its absolute value but upon its marginal utility *to you*. (See the “HAPPINESS” section below for a discussion of marginal utility)
Constantly look for opportunities to risk a little for a lot—opportunities where the gain if you are right far exceeds the loss if you are wrong and the odds are reasonably in your favor.
Never rely on the recommendations of subject matter experts when making risk decisions (except to simply gain from them a better understanding of the potential upside and downside of the various options).
Opportunity costs matter only when the cost of being wrong is low. When the cost of being wrong is high, forget about opportunity costs. Far better suffer the opportunity cost of maintaining a 90 day emergency fund that you’re unlikely to ever need than it is to need it and not have it.
Bet on the jockey, not the horse. The right person with the wrong idea is better than the wrong person with the right idea. The former will learn from his mistakes and adapt. The latter won’t.
Good decisions are made at the *margin*. Sunk costs are irrelevant to how you should proceed. Forget about them.
When information is imperfect (and it almost always is) assessing risk is difficult. In such cases choose the option that preserves optionality (that keeps the most future options available to you).
Nothing good happens after midnight. Be home before then.
Never make permanent decisions as a result of temporary circumstances. So, among other things, never make permanent decisions in a triggered state.
When choosing between two opportunities that are superficially equally appealing, choose the one that gives good luck more opportunity to play out.
TRADING AND INVESTING
Never mistake a liquidity crisis for a solvency crisis and never mistake a solvency crisis for a liquidity crisis. The distinction is important and impacts how to hedge your risk.
That which can’t continue won’t no matter how popular or ubiquitous it has become. Find ways to protect yourself against its collapse. Or better, to safely exploit its collapse.
Every optimized, centralized system is inherently fragile and anti-fragile systems (like evolution) are never optimized/centralized. Seek strategic opportunities to survive/exploit the eventual collapse or failure of optimized systems.
Seek opportunities to exploit the long term success of anti-fragile systems, especially those benefiting from network effects.
But remember that even fragile systems can persist far longer than you expect, and markets can stay irrational far longer than you can stay solvent. Avoid leverage, stay liquid and be patient.
SUCCESS
How you do anything is how you do everything. It’s the little habits that count. For instance, showing up for work on time each day is far more important to future success and happiness than which career you pursue.
Success is far more random than most believe. Great innovations and outcomes are almost always a fortuitous result of relentless tinkering and *not* the result of perfectly executing some preconceived plan.
Information is gained by ACTING, not by planning and deliberating. When the downside is limited, act! When the downside is limited, tinker! And do it *fast*.
Beginning is half done. Just start!
Fail early, fail often. “If you’re not embarrassed by the first version of your product, you’ve launched too late.” Good and done is nearly always better than perfect and not.
Never judge your past successes or the wisdom of some past decision by the results you actually achieved but rather by the loss you would have sustained had you failed. (Only idiots ever win at Russian roulette)
You become like those with whom you surround yourself. Choose wisely.
DISCERNMENT
Talk is cheap. Disregard the opinions of those with no chip in the game, including especially those of coffee house intellectuals and talking head "experts". (Note to self: Disregarding them does *not* mean reflexively assuming that everything they say is wrong, because sometimes they are right).
A biased opinion from someone who necessarily loses something that he already has if wrong is far superior to an unbiased one from someone who loses nothing if wrong.
Correlation does not necessarily mean causation. In fact it usually doesn’t. Never, ever forget it.
Be *very* careful what labels you permit yourself to assume. “American”, “Republican”, “Democrat”, “Christian”, “yogi”, “patriot”...whatever. Every label that you identify with creates an unconscious lens that distorts your vision until such time as its painfully shed.
Occam’s Razor is usually right, and therefore most conspiracy theories are usually wrong. Beware of any offered explanation with multiple layers of inherent, unverified assumptions.
Nothing in biology and little in psychology or culture makes sense except in light of evolution.
Always seek to negate your hypothesis, never to confirm it. No amount of corroborating evidence will make something certainly true. But even a single piece of negating evidence will make it conclusively false. Negate and then you will *know*.
An argument that you would not accept from your opponent under similar conditions is not worth making. And if you make it anyway, then you’re just trolling or engaging in mental masturbation (stroking your own narrative) rather than actually attempting to discern truth or to persuade your opponent.
True intuition does not contradict reason, and vice versa. Facts about outside reality that are initially discerned through intuition can always be verified by reason, and vice versa. If they can’t, then they are not facts and the insight was not from intuition.
Never depend on or vouch for the judgement of those who are devoted to conspiracies.
What can be asserted without evidence can be dismissed without evidence.
Game theory incentives will win out. No alliance or conspiracy is immune from defections when the incentive to defect is real and strong.
In the absence of much specific evidence to the contrary, never assume malice when mere incompetence or just bad luck will do.
The smeller is the likely feller. The loudest complainer should be suspected first.
HUMAN NATURE
The triggers are the guides. If it hurts its because its true or because you fear its true. Never pretend otherwise.
Offense is always taken, never given.
Except for tech, there is nothing new under the sun. Any contention that humans or society behaved substantially differently in the past than the present is bullshit. As in any suggestion that humans will behave materially differently in the forseeable future.
DEALING WITH EXPONENTIALS AND NETWORK EFFECTS
After the tipping point (third doubling from 1 percent), exponential growth patterns in technology and biology don’t just stop of their own accord until acted upon by some sufficiently capable outside force or until saturation is reached.
Once any exponential process reaches 1 percent penetration/adoption, you’re only 7 potential doublings away from 100 percent.
And once it achieves 8 percent (the tipping point), you’re only four doublings away and the odds of saturation are all but certain.
Network effects are *very* antifragile. Trust them early (but protect your downside, at least until the tipping point).
HAPPINESS
There is no happiness without gratitude.
Be always content, never satisfied.
Entitlement is the opposite of gratitude. Life owes you nothing—governments, people and “society” even less.
Do your dharma and detach from outcomes.
After a certain point, wealth and goods have diminishing marginal utility. Experiences do not. Prioritize experiences. Judge possessions primarily by the nature and quality of the continuing experiences they provide.
*Everything* in life comes at a price, most commonly a trade-off. Accepting the reality of trade-offs results is gratitude and contentment. Denying it or resisting them results in resentment and misery.
Happiness is product of making good trade-offs. You can’t give the meaningful things in life an unequivocal “yes” without giving most others an unequivocal “no”. To be happy you must say “no”. A lot. Even to “good” things.
Live where the rest of the world vacations.
Inspiration results from action and devotion. If you wait to be inspired before acting and devoting, you’ll be waiting a very long time.
Most people will choose unhappiness over uncertainty. Don’t be like most people! Simply manage uncertainty with maxims.
Most people will choose delusion over uncertainty. Don’t be like most people! Use the maxims to prevent delusion.
People prone to the perfect be the enemy of the good are both ineffective and miserable/resentful. Pure greatness does not exist. All progress is incremental and to be celebrated.
RELATIONSHIPS
Don’t do to others things what you would not want them doing to you.
There is no real relationship without brutal honesty.
Brutal honesty is far better than well-intended deceit. People can forgive and forget temporary meanness if anchored in truth, but a lie does everlasting damage.
Many people *want* you to lie to them. Don’t.
People don’t leave something (even bad things) for nothing. This explains most abusive relationships.
People change but seldom. And never in the way you expect or hope.
Take nothing personally. It’s never really about you.
Never deny someone a favor when it costs you nothing.
People seek to connect via compliments. To reject a compliment is therefore to reject the connection. Saying “thank you” or “I’m grateful”, and meaning it, are therefore the only acceptable responses to any compliment.
Being respected and disdained are two sides of the same coin. It’s impossible to gain the respect of some without offending others. If you have genuine admirers, then you will also have genuine detractors. And if you think you have neither, then you’re just pandering.
Consequently you can do nothing worthwhile in life without angering or disappointing lots of people. Just make sure you don’t disappoint yourself.
If you can’t handle angering or disappointing others, then be resigned to a life of mediocrity and angst.
When you are wrong, own it, apologize for it and mean it.
Never trust or aid a narcissist. You won’t change or help them, and they will screw you.
People generally live up to your expectations of them. Expect the best from them (except from narcissists).
People are never trustworthy until you trust them.
EMPOWERMENT
Focus your attention consistently on things that you can directly influence.
If the solution to your personal problem involves you changing other people’s behaviors or beliefs rather than you changing your’s, then its no solution at all.
Blessed are the shameless, for they shall not be shamed. Properly managed, there’s no such thing as bad publicity.
BUSINESS AND MANAGEMENT
Business is relationships.
If you’re gonna take the risk of being an entrepreneur, at least build a business that will produce *recurring* income if successful.
If you’re going to take the risk of being an entrepreneur, at least build a business where your revenue stream is secured by your clients’ assets.
What gets measured gets done. Success comes from tracking and reporting.
Exceptional performers resent a boss tolerating mediocre teammates, and mediocre teammates resent exceptional performers. A boss *must* choose sides. Side with the exceptional ones.
When hiring, intelligence is twice as important as social skills which are twice as important as ambition. Except for narcissists (never hire one).
REPUTATION AND MEDIA
Never give oral interviews to print journalists. Agree to written interviews or unedited podcasts only.
Have no secrets (except for your crypto keys).
GENERAL
Nothing worthwhile comes easily. Not even love.
What you resist persists! Don’t resist what you fear or hate. Subvert it through innovation instead. "You never change things by fighting the existing reality. To change something build a new model that makes the existing reality obsolete." —Buckminster Fuller
Feelings are just feelings. They are not problems until we act on them before getting to the bottom of them.