in Best Reads, Chris Mayer, complex systems, margins, Morgan Housel, systems, Taylor Pearson

3 Best Reads of this Week

“Well-intentioned outsiders looks at a complex system, finds it confusing (because it’s illegible), and thinks they can improve it. They come up with an idealized way that the system should work, and then use their power and authority to impose that simple, idealized vision on a complex reality. In the short term, everything seems to get better as a result, they are widely praised, and then down the line catastrophe strikes and everything comes crashing down.”

Illedgibility: The Margin Between What’s Measured and What’s Real, Taylor Pearson

“What is the modern version of cigarettes, which were doctor-recommended just a few generations ago? We didn’t know dinosaurs existed 200 years ago, which makes you wonder what else is out there that we’re oblivious to today. What company is the modern Enron, so obviously a fraud? What do most people – not a few wackos, but most of us – believe that will look something between hilarious and disgraceful 100 years from now?

A lot of history is just gawking at how wrong, how blind, people can be. Disastrously wrong, embarrassingly blind. Millions of people, all at the same time. When you then realize that today will be considered history in a few generations … oh dear. It’s unpleasant. But also fascinating.”

A Few Short Stories, Morgan Housel

“I think these points are useful and give you something else to consider when you are looking at which stocks you want to take with you on the long journey up the mountain of multi-bagger returns.

Also, if you invert everything, you get an intuitive picture of what won’t last: companies having an ill-defined purpose with lots of financial leverage, low profits, lack of innovation, easy to copy products, short-term relationships with vendors and customers, lots of employee turnover and one that repeatedly turns the cold shoulder on its community.

The Century Club, Chris Mayer