One of my favorite ideas from Morgan Housel is to bet on the behaviors that won’t change. Companies come and go, industries flourish and crash, and trading styles will change based on economic indicators that haven’t been created yet.
Our world is driven by human decisions. Even as algorithms gain more influence, there is a human that is willing to associate their name with the output. Imagine a hedge fund manager’s algo goes haywire causing them to lose 20%. Good luck with them telling their investors, “Hey! It was the algorithm that made that decision, not me.” People get upset when they lose money, especially when there is an expectation they will profit. It doesn’t matter if the year is 1921, 2021, or 2121, people will be upset when they lose their money.
What are some of these behaviors that won’t change over time? Here is a list that I’ve come up with but would love to know if you have additions!
· People want more while doing less
· People make time for what they care about and will prioritize their life choices as such
· People like being told they are doing a good job
· People like being wrapped up in the moment forgetting about the problems in their life
· People like taking a break from work
· People are persuaded by stories and facts are a way to tell them
· People don’t make the best decision when they aren’t well-rested and are in a stressful situation
· People think time is the most valuable resource
· People experience growth when put in challenging positions
· People with curious minds will be the ones to push the world forward
· People like things summarized for them