Weekly Reading

10 years from now, how different will your life be? Will you live in the same place? Spend your time doing the same things? Have the same hobbies/interests? Now think about your life 10 years ago. Did you live in the same place? Did you work at the same place? How did you spend your time? Who and what was important to you? Would or could you have guessed 10 years ago what your life would be like now? Most people between 18-68 assume that their life will not be very different

At the battle of Stalingrad in WWII, Germany had over 100 tanks waiting to be deployed at just the right time. When that time came, less than 20 worked. Despite the best engineering, those tanks (as they later found out) were susceptible to field mice nesting inside and chewing through the wires. Would Germany have won Stalingrad, and would the war have played out differently had it not been for those mice? As Housel comments on this strange course of events, “You can plan fo

Between the years 1800 and 2000, roughly 15 billion people were born. Consider how different the world would be if the following 0.00000000004% of those 15 billion had not been born. Adolf Hitler Joseph Stalin Mao Zedong Gavrilo Princip Thomas Edison Bill Gates Martin Luther King As we read in chapter 6 regarding tail events, there are a very small number of things that have an outsized impact. This is true with financial markets, and as we study the history of investing, we

Julius Wagner-Jauregg was a Nobel Prize winning physician who, in the early 1900’s before the invention of penicillin, learned how to treat neurosyphilis. It was often fatal, but Wagner-Jauregg increased the survival rate from 30% to 60%. Believe it or not, he accomplished this by injecting his patients with another disease: malaria. He found out that if patients had a high fever (which occurred with malaria), the fever would also help kill the neurosyphilis and double their

In 1989 a Ford Taurus, which is a sedan, got 18.0 miles per gallon. In 2019 when Housel was writing, a Chevy Suburban, which is a much larger SUV, got 18.1 MPG. Today, you can get fully electric trucks. In the 70s, there were projections that the world would run out of oil before 2025, where we are today. While there’s still a lot of conversations around oil use and production, we haven’t run out like the projections once estimated. Part of the reason is that we’ve found more

Last chapter we explored what happens to us when we see someone else driving a really expensive car. This chapter, let’s talk about the person actually driving the car. Assuming they bought the car (didn’t rent or lease it), there’s still far less information conferred than we might otherwise assume. If you see someone driving a $100,000 car that they bought, you don’t yet know their level of wealth or income. As Housel points out, “the only data point you have about their we

Housel used to work as a valet driver in an upscale part of LA and drove cars like Ferraris, Lamborghinis, and Rolls-Royces. He likes cars, and when he drove these in his youth he had hopes of one day owning one. Now that he can afford one, he reflects on how he felt at that time. “When you see someone driving a nice car, you rarely think, “Wow, the guy driving that car is cool.” Instead, you think, “Wow, if I had that car people would think I’m cool.” For Housel, the paradox

When Housel was in college, he wanted to be an investment banker. He earned a four-month internship his junior year but only lasted one month. As he recounts, “On my first day I realized why investment bankers make a lot of money: They work longer and more controlled hours than I knew humans could handle. Actually, most can’t handle it. Going home before midnight was considered a luxury” (italics added). Around the office it was said that if you didn’t come in on Saturday (no

The Disney franchise, founded by Walt Disney and now worth hundreds of billions, was not always a financial success. Walt started his work in the early 1920s, and by the mid 1930s his first studio had gone bankrupt. By that time, he had made over 400 shows, which were very expensive to create and financed by debt at a high interest rate. On the whole people seemed to like them, but they were not bringing in enough money to make up for their high cost. Then, in 1937, Disney cr

Jesse Livermore and Abraham Germansky were two individuals involved in the markets during the Great Depression. Both were very good, meaning they had both found legitimate ways to make millions of dollars by an early age. During the violent market crash in October 1929, Livermore was “short” the market. Without a longer explanation, this means he made money if the market went down in value. In a single day, he made the equivalent of $3 billion in today’s dollars. Germansky, o

At the time of Housel’s writing (2020), legendary investor and businessman Warren Buffett was 90 years old, and worth $84.5 billion. 40 years prior, when he was 50, he was worth “only” $0.3 billion – or 280 times less. And $81.5 billion of his $84.5 billion net worth came after his 65th birthday. Now in 2025, one month from his 95th birthday, his net worth is estimated to be $142 billion. So, what’s Buffett’s secret? According to Housel, “Warren Buffett’s skill is investing,

You’ve likely heard of Bernie Madoff, one of the most infamous financiers in modern history for his Ponzi scheme of over $60,000,000,000 (that’s $60 billion, if there are too many 0’s to count). What you may not know is that he was a very successful and legitimate businessman prior to his troubles. He helped people buy and sell stocks at a lower price, and was so good at it that his firm made between $25-50 million per year – all while offering lower prices for everyone else.

Bill Gates was one in a million kids whose high school had a computer in 1968. He didn’t do anything to get special access to it or to be at the right school at the right time – he was lucky. Of course, he had more than luck, he had hard work. Not all his classmates with the same computer access went on to found a multi-trillion dollar company. In fact, one of his classmates was also one in a million – his name was Kent Evans, and he died in a mountaineering accident before g

What do you remember about the U.S. economy during your teens and twenties? It’s not likely that you started tracking DJIA at this age, but maybe you remember headlines during these years related to inflation, economic turmoil, or unprecedented growth. Would you be surprised that, on average, how we think and feel about our own finances is largely influenced by what the economy was doing during those formative years? See two charts below from The Psychology of Money. If you w

Ronald Read never went to college and worked as a gas station mechanic and janitor for a department store. He bought a modest house at 38 and lived there the rest of his life. His favorite hobby was chopping firewood. Richard Fuscone went to Harvard, had an MBA, was a very successful finance executive, and retired in his 40s. He owned multiple pieces of real estate, including an 18,000 square foot mansion. One of them died with $8,000,000 and the other declared bankruptcy, lo