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zombolouge · 8 years ago

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Ah you are too kind! <3 I've actually taken up writing again after a long while, so I'm a little rusty. I've written quick things here and there but wanted to move on to a longer fic, but since it's my first chaptered fic I'm a tad overwhelmed. Especially for characterisation, slow-burns, dialogue (DIALOGUE!!)... It seems effortless when I read other people's work (although I know it's not), but whenever I sit down to write, the scenes are choppy and don't flow so well.

(cont) Maybe it's because I'm only at the beginning and I take things reeeally slowly, but still, it'd be nice to be able to fix this. One huge question though: how do you write from a child's perspective? For example, in the story I'm writing, Link is 10 in the first few chapters. I'm having trouble with conveying his thoughts across, since they either sound too mature or too childish. I keep saying 'his mother' whenever she does appear, and after a while it gets repetitive - but I don't think I'd use her name since Link wouldn't call her that. So how to go about writing from a third person child perspective? Thank you so much for your tips! <33

Ah, yes! I went through this same thing when I started writing again myself. I wrote a LOT when I was younger, then stopped for about 9 years before I came back to it. (I started writing again in 2014, seriously about a month later). Then it was like picking up a rusty bike and trying to make the wheels go. There are several things I wrote that will never see the light of day because they were terrible. But that’s all part of the process! So don’t feel bad if it all feels like a disaster at first, because it gets better. In the beginning, your main concern is to just try and write as much as possible, and to finish things. Once you get that down, you can start making things better through editing and more critical thinking. ^_^

Also, I am putting the rest of this under the cut because I got excessive with my word count again (surprise). Writing advice below, for those interested. <3

Okay, so I can certainly share what helps when I write longer fics, though this process doesn’t always work for others. When I wrote Tearing Down the Heavens, it started as a mish-mash of scenes that I had half-written that I was stringing together. I think by like chapter ten I had already gotten overwhelmed trying to do that, and I opened a word doc and just made a list of the “important plot moments”. Over time this grew into a true, blue outline.

I don’t think I could write such longform fic without the use of an outline. Some writers can, and some writers even find that an outline completely ruins their creativity, but for me it’s a necessity. Sometimes my outline is incredibly detailed, including lines of dialogue or descriptions or notes about backstory and themes. Other times it’s not more than a line or two about a scene. For instance, the first chapter of A Hundred Years in the Making has a very detailed outline, where I wrote out almost all the dialogue between the King and Vallus. I ended up changing it as I wrote the scene around it, to make it flow better, but the base was there. In contrast, my notes for the portion where Link is traveling to the castle were vague (I actually only put “Write shit about Link’s feelings while he’s on the horse”, which is not particularly helpful notes to myself, but there you have it). I also don’t tend to flesh out the outline all at once. For instance, I may know that I want a certain thing to happen, but I don’t know how I want it to play out or any other details. So I’ll make a note in the outline that says something like “Character tries to leave, gets caught by other character” or something. Then, as the earlier chapters get written, I may add more context, so I could end up with something like this (I’ll use some of the older outlines for Facing Down the Void for this example):

“Autumn wakes up in a panic, convinced something is wrong.

- Solas is trying to leave, she races through the cold night air to find him and confronts him. He is hurt, miserable to be back around her and torn about what he must do, so he is cold to her. His attitude breaks through her calm, and she starts to cry as she yells at him, demanding to know why he’s leaving again. She doesn’t understand, he doesn’t want her to, but the sound of her voice breaks his heart. He turns and makes his confession, kissing her even though he knows its the worst thing that he could do. She is stunned, and finally lets him go as she processes thing.”

That eventually turned into a pretty complex scene that I wrote very early on and edited several times before it was published.

The reason why I find outlines necessary is that I have trouble writing something if I don’t know where it’s going. I need to have at least a general idea of what I’m building to, or it takes me about 8 times longer to write a chapter. It helps me do proper foreshadowing, and it helps me understand character motivations and growth arcs better. For instance, in As Bright as the Stars, I knew that Saeyoung was going to lie to try and hurt Nicky from the get-go. I had been setting that betrayal up from the start of chapter one. If that moment had been a surprise, however, if I hadn’t planned it, then it wouldn’t have the proper groundwork laid before it. Twists and turns in the plot are what make a story gripping, BUT, they can’t come from nowhere. Your reader should look at surprises and say “I did not see that coming, but I should have”, not feel like it came completely out of left field. You should be able to point to your previous chapters and say “see, there is the proof that this could happen”. Otherwise the shock is cheap, and people tend to lose interest.

Outline will help you map out events, get foreshadowing in place (important for pretty much all types of stories, including things like slow burns), and understand the characters better. Because when you outline, you are forced to think “what would this character do in this situation”, which then makes you think about the character and think about how they react to things and how they think. Although your story is still going to throw you curve balls, and you shouldn’t be afraid to change an outline when needed. In As Bright as the Stars, I didn’t realize that Vanderwood was going to be such a huge part of it at first until I wrote her first chapter and realized “oh shit I have feelings about this character that need to be told”. I then paused writing the story and worked on my outline to expand it to include this new revelation. So things will still happen that weren’t planned, but at least you have good starting points to handle them better.

I’ll be honest, though, part of my process is pretty much nonstop consideration. If I am not actively writing, I am usually thinking about writing, or thinking about characters, or word choice, or themes. I’ve written entire scenes in my head on my morning commute and then hurriedly outlined them once I arrived at work. I’ve spent actual hours thinking about something a character did and trying to figure out WHY they did it, to understand that character. So don’t feel bad if a good chunk of your “writing time” is just sitting around and thinking about it, because you have to work those things out at some point before the words will start to come.

Flow!! Okay, so one of the best things for flow is reading it out loud. You will, in fact, feel like a moron reading your own work out loud to yourself, especially at first. But hearing the words spoken into your ears will trigger different processes in your brain than just reading them. This can often highlight points where there are problems, or where the word order doesn’t work. This goes double for actual dialogue, which should be read out loud until you feel like you have become the characters. If a scene feels weird, it’s usually because your making a character say or do something that doesn’t feel like something they should say or do, which will throw everything off.

Another thing that I find helpful for both flow in general and dialogue is to map out a scene in very specific, very bland details. (ESPECIALLY FOR ACTION OR SMUT, THIS MAKES THOSE SCENES SO MUCH EASIER). So I would open up my outline, or an empty doc, and write something like this:

“Character A (Jeffrey) opens the door.

Sees Character B (Heather) arranging matches.

Jeffrey: Oh, I’m sorry. I wasn’t aware...(pauses, curious) What are you doing?

Heather glares. “I’m arranging matches.”

Jeffrey: “Oh.” (pause) “Why?”

Heather (upset): Because it’s what Sebastian would have wanted!”

Jeffrey closes the door slowly.”

I can then look at that outline and turn it into a scene because I have enough notes to go off of, and I know what’s supposed to be happening at any given time, so it lets me focus more on the descriptions rather than the ideas. I wrote up a quick example scene based on that outline (it is rushed, so forgive me if it isn’t a masterpiece XD)

“Jeffrey placed his hand on the cold door handle, already feeling the weight of the other room bearing down on his shoulders before he had even turned the brass. The house was quiet, and the room was quiet, but he was certain that there was unhappiness beyond the threshold. Still, it was a door, and what purpose would doors have were they not meant to be opened? He twisted his palm, pulling the knob along with it, and pushed the wooden boards forward to reveal the room beyond.

He was surprised to see Heather within, standing in front of a table with one hand on her half-cocked hips. She didn’t look up as he blinked at her, taking in the silent scene with all the dignity that he could muster in such a situation. The house was silent, so he had presumed that it was empty. His error had been the source of his ominous premonitions, knowing that the room had held misery without knowing why. Heather’s presence had that effect on them all lately.

He cleared his throat, wishing that he could be a thousand miles away from this position at precisely this moment. “Oh, I’m sorry. I wasn’t aware...” his words trailed off, flat and lame in the deadened air as she shifted, moving just enough so that he could see the stack of matches on the table before her. She lifted one in her long fingers, the tip of the match the same ruby color that was smeared across her fingernails. She held it aloft, inspecting it for something, judging its character like a redheaded soldier that had been stripped and homogenized before being shipped off to war. She then took it and placed it atop a second stack of matches, piled in a tower that shuddered with the weight of the new addition. “What are you doing?”

She narrowed her eyes into a sullen glare as she looked at him, clicking her tongue before offering the obvious. “I’m arranging matches.”

“Oh.” he nodded, a compulsory action, as though this made perfect sense. He should have left it, should have mumbled some apology and retreated from the room, but his damnable sense of curiosity burned too brightly in the back of his throat to clamp down on the question before it came tumbling out. “Why?”

She rounded on him, her hands clamping into furious fists that stuck to her sides, the matches in the tower tumbling across the table in careless disarray. “Because it’s what Sebastian would have wanted!” Her voice wavered between madness and grief, and he winced at the force of it, seeing the tears that he had unleashed. It was too much, too great a burden to bear in this moment, on this day. He felt sorry for her, sorry enough to furrow his brow in a voiceless apology that would do less to disturb the fraught air than words would. He felt sorry, but not sorry enough to reach an olive branch across the divide between them. Instead he backed out of the room, shutting the door with the slow deliberation of someone who knows he could have been a better person if he had just left it open. Her cries of frustration followed him out, and he knew that he was a terrible man.”

I think I spent about ten minutes on that little scene, and that was mostly because I had the blueprint of that outline to go off of. I knew what the characters were doing, and I had notes about when it was important for them to feel a certain way, so it was easy to create a bunch of flowery prose around it (well, not EASY, but certainly easier than if I had just tried to plop it out onto the page from nothing). Now, I usually write out all my dialogue in this manner before writing the full scene, ESPECIALLY important dialogue or dialogue involving more than 2 characters. Just write it out like a script, with the name of the character followed by what they said, and that’s it. Maybe a note or two of what they did or how they said it, but only if it’s really important. What this does is let you focus on what they’re saying and if it fits their character, without getting bogged down in irrelevant descriptions or worrying if you’ve used the word “said” too many times. It also makes it easier to read out loud to yourself to check how it sounds. The dialogue should always be able to flow and sound good on its own, with the rest of the text removed. If it doesn’t, then there’s a disconnect in the way they are speaking that will interrupt the flow of the whole scene.

Okay, now on to your more specific question. Writing children!

So one important thing to remember is that children are not stupid, nor do they think in baby talk (or talk that way). They also don’t tend to think of themselves as juvenile, because in their minds they already know enough to be basically an adult. This is especially true for a 10 year old, who usually wants to be out in the world experiencing things on their own, unless they’ve experienced something in their past that would dictate otherwise. They think they know everything, and that parents are just being dumb when they restrict them or make them follow rules.

One thing about writing children is that they tend to be a bit more literal than adults. You won’t get a kid saying a lot of cutesy babytalk, but you will get them being point blank enough that it can be adorable or comical. It is also important, when writing a POV from a child’s perspective, that they will be lacking certain knowledge or ways of expressing things, but they won’t know that. So, for instance, if I were to write the scene of Link from Ocarina of time seeing Ganon taking off with Princess Zelda (just before she throws the Ocarina), I might try something like:

“He saw the horse thundering across the bridge, massive and domineering. He couldn’t quite see who was riding it, but he felt a sickening feeling in his stomach all the same. Anyone who rode a horse that mean couldn’t have been a good person.

His fear was confirmed when the rider yanked the reins of the beast, causing it to rear up above Link’s head. He felt like an ant, hapless and waiting to be crushed under the foot of something dark and nameless. The horse returned to all fours, flaring its nostrils, and Link could see that man - Ganondorf - was astride the saddle, Zelda clutched in his metal-clad arms. The Gerudo smirked, and it made the feeling in Link’s stomach coil and writhe like a snake. A furious snake that was trying to flee from the scene, trying to force the person around it to move away, but Link stayed rooted to the spot, his feet as still as tree trunks. He could have gone his whole life without seeing something so evil as Ganondorf smiling, the glint in his eyes like poe-fire. It made him feel small and insignificant, a spec of dust in a whirlpool. It made him feel sick, and if he had been able to move he might have turned and wretched into the grass beneath his boots.

Ganondorf dug his heels into the horse’s ribs, and then everything happened in a flash. The horse surged forward, straight towards where Link was standing, and he had to leap out of the way to avoid being trampled. He felt something big and heavy bump into him as he was in the air, and the breath disappeared out of his lungs with a short wheeze. He hit the ground, and he thought he heard someone yell his name as he blinked, trying to clear the daze. Everything felt fuzzy, like reality had become a vague humming sound in his ears and nothing more. The sound of hoof beats turned from thunder to drums, and then faded slowly as the horse galloped away. Link tried to breathe, unable to keep himself from trembling as he did so.

Zelda had been right. That man was a terrible man.”

So, in this little snippet, I tried to keep things more simplistic than I normally would have. I avoid phrases that are overly flowery, and get to the point a bit quicker. I also avoid saying “Link was terrified”, because a 10 year old might not have the experience to know what terror feels like. They also may not want to ADMIT they are scared, especially not in the moment when adrenaline is high. Instead, I went for describing what he feels, so that the reader gets the idea. Additionally, when he gets hit, I made it more vague. If Link were an adult, I would have changed “He felt something big and heavy bump into him as he was in the air, and the breath disappeared out of his lungs with a short wheeze. He hit the ground, and he thought he heard someone yell his name as he blinked, trying to clear the daze. Everything felt fuzzy, like reality had become a vague humming sound in his ears and nothing more.“ to “He felt a blunt object slam into his side, just below his ribs, driving the breath out out of his lungs on impact. Shock rolled through him as his dodge carried him into the ground, the princess yelling his name as the horse retreated. He was dazed from the blow, and as he floundered on the ground he tried to shake away the humming buzz that was affecting the clarity of the world around him.” The difference here is that Link would have known he was hit by something, and where, and he would have had the words and understanding to know that he was in shock from the blow, and been able to take better effort to try and restore himself.

Okay, so on to your final question, about what Link calls his mother...you’ll want to avoid using all forms of the name, because that would sound weird. If you feel like he would call her “mother”, than you should stick to that. If you feel like it’s getting repetitive, you can try changing up sentence structure to add variety, but be careful you don’t do it too much. Depending on the scene, you may not need to continue listing her, and just revert to “she”.

For example:

“Link’s mother smiled, as warm as the sun above them. “Come, sit with me.” she pat the grass beside her, and he ambled up the hill to join her. She was still smiling, and he tried not to look sullen. He must have failed, because she folded her hands in her lap, giving him a knowing look. “You’ve been bickering with your father again, haven’t you?”

“No.” he sounded like a spoiled brat even to himself, and rolled his eyes as he gave into her ability to know everything he was thinking before he had to say a word. “He’s just...he’s so...”

“Stubborn?” She quirked her eyebrow skyward, and he laughed and nodded, feeling the anger in his chest dissipate as she brushed his hair off of his brow. “He can certainly be...firm. You know that he means well, don’t you?”

So, in that, I only had to mention “mother” once, but you still knew exactly who I was talking about (I think, at least lol). There are also other ways to indicate things, but you definitely want to avoid things like switching from “mom” to “mommy” to “mother”. In this instance, “Mother” is the stand-in for her name, so you would treat it as such. You ALSO wouldn’t switch to her actual name if you’re in Link’s POV, because he wouldn’t think of her that way.

Oh boy, I rambled for waaaaay too long. Hopefully this helped??? Haha, I am very sorry that this is so terribly verbose, I got carried away.

If you have follow-up questions, feel free to let me know. And if anybody else has different questions, you can also feel free to let me know. ^_^ And of course, this is not a hard-and-fast rulebook. These are just the things that work for ME, which may not be helpful to anyone else. Everyone’s process is different, so don’t feel too frustrated if you try this stuff out and it is utterly useless XD

Thank you so much for thinking of me, and I hope that at least some of this is usable to help you get your story written!!!! <3 GOOD LUCK! YOU CAN DO IT, I BELIEVE IN YOU.

#zom gets asked #writing advice #I rambled I'm very sorry #anon friends #Anonymous

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heliosfinance · 8 years ago

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My Interview with Morgan Housel

Note: This interview was originally published in the April 2017 issue of our premium newsletter – Value Investing Almanack (VIA). To read more such interviews and other deep thoughts on value investing, business analysis and behavioral finance, click here to subscribe to VIA.

I sincerely believe in what Charlie Munger often says about envy, that it is a really stupid sin because it’s the only one you could never possibly have any fun at. I am lucky to have stayed away from this sin as far as investing and other aspects of life are concerned.

But if there is one, and just one, person who arouses this sin in me every time I read him is…Morgan Housel. And it’s for the simplicity of his thoughts that he puts across through his powerful writings. I have tried to emulate Morgan several times in my writing endeavor, but he raises the bar each time he publishes something new, more simple yet more powerful.

Morgan’s posts at The Collaborative Fund, where he is currently a partner, have been a great source of learning for me. I have also read him for years at his earlier stints at The Motley Fool and The Wall Street Journal.

Morgan is a two-time winner of the Best in Business award from the Society of American Business Editors and Writers and a two-time finalist for the Gerald Loeb Award for Distinguished Business and Financial Journalism. He was selected by the Columbia Journalism Review for the Best Business Writing 2012 anthology. In 2013, he was a finalist for the Scripps Howard Award.

In this interview, Morgan shared with me his simple investing thought process, what gets most people into trouble in investing, and the people who have inspired him the most in his journey.

Let’s get started right here.

Safal Niveshak (SN): Tell us a little about your background, how you got interested in writing and investing, and how you have evolved in these fields over the years?

Morgan Housel (MH): I started in college in investment banking. I always loved investing and knew I wanted to do it as a career. But the culture of investment banking totally put me off. I like to have time to think things through, and any culture that emphasizes 24/7 speed and fixed process over deliberation is one where I wouldn’t do well at. So, I moved on pretty quickly from that.

I then got into private equity, which I enjoyed. But this was summer of 2007, and global credit markets started freezing up, which is devastating for private equity firms that own highly leveraged companies. So, I needed to do something else.

A friend of mine wrote for the Motley Fool and said I should give it a shot. I never thought I’d be a writer, and I majored in economics in college, which meant I didn’t write much at all. But I applied, thinking a) they wouldn’t hire me, and b) if they did I would do it for six months before I found another private equity job. I ended up staying for 9 years and fell in love with the process of writing about investing.

Two years ago, I met a guy named Craig Shapiro from Collaborative Fund, a venture capital fund. We hit it off right away. Even though we come from very different backgrounds we see the world through a similar lens. I joined Collaborative Fund nine months ago and it’s been an amazing team to work with.

How has my writing evolved? Whenever you do something for 10 years you’d think it’d get easier. But writing has become much harder for me. I’ve written 3,500 articles, which means all the low-hanging fruit is long picked. It’s much harder for me to come up with ideas than it was, say, five years ago. So, I’ve slowed down as a writer. If I used to write 10 articles a week, now I write one or two. Now the stuff I write is generally deeper and longer, but every year it gets harder to come up with new ideas and topics.

Also, I’ve just become much more sceptical over time. That’s probably the biggest change in my writing.

SN: That’s an interesting journey you have travelled, Morgan. Anyways, as much as I understand, you aren’t a full-time investor nor do you manage other people’s money. How do you manage your own money? Is it through direct stock picking, or mutual funds, or both?

MH: My entire net worth is a house, a checking account, and the Vanguard Total Stock Market Index. I don’t think investing needs to be complicated so I keep it as simple as I possibly can. The fewer knobs you have to fiddle with the fewer opportunities you have to screw up over time.

SN: Wonderful! That’s as simple as it could get. What’s your broad investment philosophy? Has your philosophy changed much through the years? If yes, how?

MH: My broad philosophy is that investors are their own worst enemies, and the real key to good investing over time has little to do with the investments you pick and lots to do with how you manage your behavior.

Financial journalists spend years quibbling over investing strategies that might improve your returns by, say, 50 basis points a year, and then a financial crisis hits, people are forced to sell stocks to pay their bills or keep their sanity, which ends up costing them 400+ basis points a year. It’s so clear which one matters more.

To me the evidence is overwhelming that if you spend 10% of your investing energy on picking a portfolio and the other 90% on focusing on keeping your emotions in check, putting market volatility into proper context and doing everything you can to take a long-term view, you’ll end up doing better than the majority of investors.

SN: It’s good you talked about emotions, and how it is a huge mistake investor make falling into emotional traps time and again. When you look back at your own investment mistakes, were there any common elements of themes?

MH: Overconfidence. That’s true for most people and I was no different. At various points in my career, I thought I was cleverer than I was or had more insight than I did. The few times it “worked” was likely due to luck. More often it just didn’t work.

Some people are very good at certain segments of active investing. But everyone, no matter how they invest, must fight overconfidence. It’s pervasive and is probably the second-largest cause of investing regret, after ignorance.

SN: When it comes to direct stock picking, the worst problems investors get them into is by falling into behavioural biases. How has been your experience on this front? What tricks do you use to minimize mistakes of behavioural biases? What are the most common behavioural mistakes you make, apart from overconfidence that you mentioned earlier?

MH: This might sound like a weird comparison, but it’s one I think about a lot. I vividly remember on September 11 2001, looking out the window and thinking about the amount of suffering that was going on at that very moment. It’s a weird feeling to know that thousands of people are suffering at a specific spot in real time, in a way that you can accurately visualize, rather than a hypothetical. It just melts your mind.

In 2008 and 2009 I remember having a similar feeling, thinking about all the people who at that very moment were taking actions that would affect them for the rest of their lives — selling when stocks were cheap in a way that would almost certainly impact their ability to ever retire.

Of course, the impact was orders of magnitude less than 9/11, but I had the same strange feeling of thinking about the number of people who, at that very moment in October 2008, were experiencing something that would hurt them the rest of their lives. It felt strange. That’s when I started getting really interested in the behavioral side of investing. I see about 80% of investing as a psychology game.

The big takeaway from 2008 and 2009 was how quickly your own actions could harm the rest of your financial life. It really came down to understanding your own risk tolerance and how that fit into your time horizon. Panic selling is the most common behavioral mistake in investing.

For me, fighting it has been a combination of holding a lot of cash and studying market history. But there’s no easy solution to behavioral biases. These things have millions of years of evolution backing them up. The best you can do is be honest with yourself about your goals and your tolerance for decline.

SN: Okay, what’s the behavioural mistake with the biggest impact that’s the least understood or noticed?

MH: How people think about fees are probably the least-noticed bias.

Most investors don’t actually write a check for their fees. They’re deducted from your fund or investment account automatically. When something is so out of sight, out of mind, you don’t pay rational attention to them in the same way you do, say, the price of a gallon of gasoline.

The result is that investment fees may be one of the largest — if not the largest — annual expenses for upper-middle-class households. A couple nearing retirement with $800,000 in mutual funds could easily pay 1% in fund fees, 1% to a financial advisor, and 0.5% in trading and other costs. So, 2.5% in fees on $800,000 is $1,666 a month — an amount that is very real but for which the customer never actually sees or pays an actual bill. For perspective, the average mortgage payment in America is about $1,300 a month.

A lot of financial advisors earn their fees, especially if they can manage a client’s emotions and endurance. But the way investment fees are structured means people end up paying way, way, way more than they would for other service-based products.

SN: How can an investor improve the quality of his/her decision making? Does maintaining a journal help? What has been your experience in improving your own decision making over the years?

MH: Most medical doctors still go to a doctor to get their own check-up. Investors should do the same. Even if you don’t have a financial advisor I think it’s important for all investors to bounce their ideas off trusted advisors — friends, mentors, family, whatever.

Robert Shiller once said, “You have to understand that your own thoughts are not really your own thoughts.” Everything you know is a product of the people you’ve met and the experiences you’ve had, most of which were out of your control. That’s always stuck with me. It’s a reminder of how hard independent thinking is, and how important it is to hear out the views and thoughts of a diverse group of outside experts.

SN: That’s a very pertinent point you made, that independent thinking is hard. Now, with so much noise all around, it’s become terribly hard. With traditional media, TV, bloggers, twitter, etc., there’s so much information flow these days. It can feel overwhelming. How do we go about curating signal from noise?

MH: I’d think about two things.

One, when someone on TV says (or a journalist writes), “You should do X with your money,” stop and think: How do you know me? How do you know my goals? How do you know my short-term spending needs? How do you know my risk tolerance? Of course, they don’t. Which means you shouldn’t pay much attention to it. Personal finance is very personal, which means broad, general, advice can be dangerous.

For media, I’m most interested in historical finance, which helps put investing into proper context, and behavioral finance, which lets you frame investing based around your own goals, flaws, and skills. But taking direct advice from someone who has never met you is asking for trouble (this includes me).

SN: How do you think about risk? How do you employ that in your investing?

MH: I have two definitions of risk –

Risk is the odds that you won’t be able to do something in the future that you reasonably need to do to keep yourself happy.

From Carl Richards: “Risk is what’s left over when you think you’ve thought of everything else.”

The first is a reminder that risk is different for everyone, and is highly dependent on your time horizon.

The second is a reminder of how hard risk is to think about. Risk is, almost by definition, the stuff we aren’t thinking about.

SN: Indeed! Anyways, if you had just two-minutes to advise someone wanting to get into investing, what would your advice be? What are the biggest pitfalls he/she must be aware of?

MH: Keep it simple. Don’t try to be a hero. Compounding takes a lot of time. Volatility is the cost of admission for high long-term returns. That’s the message I’d get across. It’s simple but encompasses the majority of what you need to know.

SN: What are the most important qualities an investor needs to survive the complexity of the financial markets?

MH: I think it’s a combination of humility and a fine-tuned bullshit detector.

You need humility to prevent yourself from overcomplicating investing more than it needs to be and taking risks greater than you’re able to handle.

And you need a fine-tuned bullshit detector to protect yourself from the swarms of sales pitches and get-rich-quick schemes that plague the industry.

There are other things — a good grasp of basic arithmetic, delayed gratification, the ability to live below your means. But those first two are most important.

SN: You wrote a wonderful note in Feb. 2017 on getting vs staying rich. You mentioned about cultivating humility as the way to stay rich. If one is not humble by nature, can humility be cultivated?

MH: Yes — through humiliation. Lack of humility always catches up to you. Look, in markets, you’ll receive some return over the next 20 years, and most people who try to front-load those returns into shorter periods of time will cough up whatever excess short-term returns they earn down the road — reversion to the mean. It’s very similar with humility. Most ego you have today will be balanced out with humiliation down the road.

SN: Which investor/investment thinker(s) do you hold in high esteem?

MH: My top five include –

Michael Batnick

Ben Carlson

Jason Zweig

Craig Shapiro

Brent Beshore

All have an incredible mix of insight and humility that is incredibly rare. They’re also just great people.

SN: You inspired many through your writings. Which are some of the books, blogs, and other resources on investing, behaviour, and multidisciplinary thinking that have inspired you the most over the years?

MH: This might sound odd, but I think reading about World War II has had the biggest impact on my thinking. There are few events in history that were as transformative and as well documented as World War II, so it’s just an incredible period to study to learn how people dealt with adversity, uncertainty, despair, and hope. The most accessible piece of content here is Ken Burns’ documentary, The War. It teaches you more about human behavior than anything else I’ve come across.

SN: If you were to give away all your books but one, which one would it be and why?

MH: Nassim Taleb’s book Antifragile is probably the book that I go back to the most. Taleb is a prickly personality but he’s an incredible writer and can explain complicated topics in easy-to-understand ways without dumbing it down at all. It’s a very hard skill and he’s mastered it. If you look past his ego and sharp personality I think he’s one of the smartest thinkers around today. Or at least he’s a very smart thinker and an excellent communicator.

SN: Hypothetical question: Let’s say that you knew you were going to lose all your memory the next morning. Briefly, what would you write in a letter to yourself, so that you could begin relearning everything starting the next day?

MH: I love the hypothetical question, but I think it’s impossible to relearn stuff in a planned way, since so much of what you know is based on past experiences that can’t be replicated. How do you teach someone about what it felt like to lose half your money in 2008? You can’t. You must experience it. Same for bubbles. No book can recreate the emotions of 1999.

But … I’d leave a list of 10 people to talk to, and I’d ask each of them for four or five hours of time where I sit them down and say, “Tell me the basics of your field that explain the majority of the outcomes.”

SN: What would you be doing if you weren’t writing and investing?

MH: I have no idea. I think I might enjoy teaching elementary school, but I’d probably get bored of teaching the same thing repeatedly. But if you strip out the career luck I’ve had and look at my academic background, I should probably be an accountant working 90 hours a week in a dark basement somewhere.

SN: What other things do you do apart from writing and investing?

MH: Mostly reading. I try to read more books and fewer articles. I’m also a growing fan of podcasts. And I try to walk a lot. We have a young son, so we sleep when we can — which isn’t much.

SN: That was brilliant, Morgan. Thank you so much for sharing your insights with Safal Niveshak readers. I wish you all the best for your work and life.

MH: Thanks Vishal! I hope your readers find this useful in some way.

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sunshineweb · 8 years ago