Sunday Wisdom No. 81

The best deals are the ones you can walk away from. But how do you decide when to press harder, and when to walk away? Mountaineer Ed Viesturs may have something to teach us here.

Welcome to Issue 81

👋 Hi, I’m Abhishek. Welcome to Sunday Wisdom, a weekly newsletter packed with timeless insights on better thinking and decision making that you can use at work and home. I appreciate you being here. If you are getting value from this, you can buy me coffee or share this newsletter with a friend.

How to Walk Away from the Best Deals

The best deals are the ones you can walk away from. This is taken to the extreme when you face a once-in-a-lifetime opportunity that is slipping off your hands. How do you decide whether to press harder, or to give up? Mountaineer Ed Viesturs may have something to teach us.

Ed Viesturs has climbed Mt. Everest and stood on top of the world’s highest peak seven times. Seven times! What’s more interesting is that he didn’t make it in his first try, and neither in his second try. This one time, when the weather condition worsened, he turned back when he was just 100 metres away from the summit. It’s time to read and learn.

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I’ve Quit My Job

This is the second time I’ve done it. I had quit my job exactly 5 years back in 2016. But unlike last time, this time I had planned ahead. Last time I was stupid enough to quit my job despite not having any savings.

On top of that, last time I had convinced a friend of mine to quit his job as well, since I wanted to start a business with him. In retrospect, this wasn’t the best decision since the business didn’t do well, and after one year we had to shut it down. Luckily, both of us got new jobs that paid well. It turned out okay, but it was foolish. This is something I’ll never recommend.

In this video I discuss how I planned my finances this time, and what all I’m gonna do with the free time I’ll get. If you plan to quit your job for any reason, this video would help. It’s time to watch and learn.

Watch on YouTube

Noteworthy Ideas

Following are a bunch of ideas on various topics from my personal library of notes that I’ve collected over the years. I briefly talk about my note-taking process in this video.

Grow Slowly

Humans, fishes, birds, and rats that grow slowly live longer. The same applies to businesses and personal wealth as well.

Warren Buffett once said: “Charlie and I always knew that we would become incredibly wealthy. We were not in a hurry to get wealthy; we knew it would happen. Rick was just as smart as us, but he was in a hurry.”

Rick Guerin was a third partner who started investing with Warren Buffett and Charlie Munger, but was forced to sell his Berkshire Hathaway stock for less than $40 a share during the 1974 recession.

Relentless focus on growth at all costs always backfires. There is a graveyard of companies whose early success pushed them to grow as fast as they could, right past the point where growth killed them.

Sure, you’ve “acquired” 50,000 users, but do they like your product or are they here only for the discount? Cool, you got to $50 million in revenue, but do the unit economics work? Will they ever work?

Growth is not a strategy, it’s a tactic. When undisciplined growth becomes a strategy the business loses its way. What creates a strong base is slow growth. Likes fishes, trees, and rats, a business needs a strong base to live long.

Effective Strategies Are Boring

Prevention is better than cure, but prevention is boring as hell. For example, if you don’t smoke, you won’t get cancer. And if you don’t get cancer, you’re not going to die from it. That’s a simple truth that we overlook because it’s intellectually not very stimulating and exciting.

Persuading somebody to quit smoking is a psychological exercise. It has nothing to do with molecules and genes and cells, and so researchers don’t find them cool, despite the fact that stopping people from smoking will vastly impact anything any cancer researcher can hope to do in a lifetime.

Similarly, the solution to 99% of financial problems is “save more money and be more patient.” Nothing is more capable of moving the needle, but it’s so boring, it almost makes you sound like your grandma.

In both cancer research and investing advice, things that are boring but effective are discounted relative to things that are exciting but (knowingly) less effective.

Just because avoiding war is boring compared to winning one, you wouldn’t want to look for opportunities to get into one.

Important Things Recur

If you find an event that is true in more than one field, you’ve probably uncovered something particularly important. The more fields it shows up in, the more likely it is to be a fundamental and recurring driver of how the world works.

For example, you are bound to learn more about money and investing by reading things that have nothing to do with investing, such as sociology, psychology, history, etc.

Restricting your learning to a narrow lens means you’re less likely to uncover the biggest and most important parts of the field. Diversify your learning.

👋 That’s All!

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As always, please give me feedback. Did any of the ideas resonate with you? Do you disagree with anything? What do you want more or less of? Any other suggestions? Please let me know in the comments.