The Psychology of Money: Surprise!

Jan 31

In the intricate world of investments, the unexpected is not just a possibility but a constant reality. Delving into the markets, we often encounter unprecedented events that challenge historical patterns and conventional wisdom. While using history as a guide offers insights, it can also blind us to outlier events—those rare occurrences that shape our destinies. In this episode, we discuss Chapter 12 of The Psychology of Money by Morgan Housel, focusing on the element of surprise in the ever-evolving landscape of finance.

Listen in to learn about the butterfly effect, recognizing that seemingly small events can have monumental consequences. Housel's exploration of surprise prompts us to reconsider our reliance on historical norms and embrace the fluidity of finances. You’ll also hear how acknowledging the inevitability of change can empower you to navigate the unpredictable journey of investments.

What You’ll Learn:

The problem with using history as a guide.
The importance of keeping an eye on outlier events.
How the butterfly effect can impact your life.
Why we must remember that things change.

Ideas Worth Sharing:

“There will always be things that will happen that have never happened before and may feel unbelievable.” - Brad Gotto
“What is happening at any given moment can be tied back to a handful of events that were impossible to predict.” - Matt Stahl
“Historians are not prophets.” - Brad Gotto