What if “Doing Good” is a waste of time?
How about “Avoiding Bad” instead?
“Rule number 1: Never lose money. Rule number 2: Never forget rule number 1” - Warren Buffet
Last week has been a whirlwind of sorts and it got me thinking about why this happened in the first place. Why would SVB park 78% in long-term securities while their deposit base is short-term in nature? Why would risk management be ignored, while you're a heavily leveraged entity? Why wouldn’t they say NO to the gush of deposits when they didn’t have attractive places to deploy the cash into?
I don’t have clear answers yet but I am sure we will get to know in time what the management was thinking. Till then, this whole episode has got me thinking about my choices in a fundamental manner. And I will illustrate that to you with a reference to my all-time favorite restaurant - Wagamama.
I love this restaurant and there has not been a month in the last 17 years that I would have missed eating here unless I was out of UAE for a month or more. They have a dish called Chicken Katsu Curry, and I love it. The crispy chicken is delicious and so is the dressing on the salad that comes along. The best part of the dish is the katsu curry, which has sold upwards of 2.5 million times in the past year alone. This curry has a burst of flavors that explode in your mouth and hits you like a breeze of fresh air. It’s been a treat to get my hands on katsu curry every time I have been there.
But my love for this dish and the place hasn’t stopped with me. I have made it a point to take everyone there, who is dear to me or associated with me. Even my wife and I went there on our first date in 2008 :) So you get my admiration for the dining experience here. And just imagine my anxiety when I am anticipating the reaction of my guests when they taste the dish for the first time. Now that’s where it’s been tricky -
My wife had never tasted Japanese fusion food ever before and didn't know how to react.
My most important banking client had his first bite and it reminded him of a Parsi dish called ‘dhansaag’
My in-laws were missing their dal rice for sure
My parents were laughing at my anxiety
But my sister liked it, or maybe she was just being nice to me :)
My friends loved it and we have gone there 100s of times
It was the same dish, but it was awesome for some, new and different for some, naaah for some, and worth another visit for some. And that’s ok because that is how life is with almost everything.
Some like coffee, and some like tea.
Some like vegan, and some like keto.
Some like investing, and some like trading.
Some invest in indices, some invest with active managers.
To each their own, and hence it is almost impossible for two of us to have exactly the same likes or similar understanding about any subject matter. Our earlier experiences, our learnings, our experiments with food, and our own journeys till now have a huge bearing on our perspectives, taste buds, thought processes, and on our psyche as a whole.
And if this is the case, then how can I expect you to endorse what I am labeling as good? What’s good to me may be ok for you. What's great for me may be just lame for you. What’s awesome to me, maybe a waste of time for you. And that’s ok.
But I see so many people trying so hard to look good in front of others, be liked by others, burn themselves on the altar of someone else’s validation, or doubt themselves because of someone else’s opinions about them.
It is impossible to standardize “goodness” in everyone’s minds. And hence it becomes a losing battle, a soul-sucking endeavor if you even tried to climb this mountain that leads only to misery and anguish.
I have a proposition to make. This has already been made by many greats earlier, so I will just be reminding those who have read about this, and for many others, this will sound like a curve ball. But bear with me.
How about we replace chasing the good by committing to avoiding the bad?
What's bad exactly? Does this have higher odds of being the same in people’s minds? Can we share a common opinion on bad things? At least relatively, if not in absolute terms. We may not express it, but we know in our hearts that something is wrong.
Let’s explore these questions with reference to a visit to another restaurant.
I remember taking my inlaws to an Italian restaurant in Dubai Mall for a classy meal, more than 10 years back. That was my first dinner outing with them, and I wanted to impress them. But I did the mistake of choosing a place that I myself had never been to. I don’t even remember why I chose this place, but unfortunately, I did.
Everything from the start was out of place. It was crowded, there was hardly any room to move our chairs, the waiters were in a rush and we felt like tuna fish packed in an air-tight container. It would have been ok, and we had forgotten it all if the food was great. But NO - that was the worst part of the evening. The pasta was undercooked and dry, the pizza dough was rubbery and not appetizing.
Just about everything - everything - that could be wrong went wrong that evening. And we all had the same feeling, just the intensity of disappointment varied. I was disappointed with the whole experience, in laws didn’t enjoy the food at all but didn’t say anything to their son-in-law, my wife didn’t enjoy the claustrophobic seating, and we all are better off having forgotten this episode completely.
Post that episode, we tried many restaurants and traveled to different cities and countries too, but not once, did we repeat that very experience again. We visited places with ⅘ star ratings, we booked in advance, or we went at times when it was less crowded, or maybe we just got lucky.
But we all are on the same page as to what a bad dining experience feels like.
Few more analogies #
Whenever we have attended parties, there always is someone who takes to drinks like Johny Walker will stop walking and drop dead tomorrow. The after-effects are painful for all to experience and come with the added nuisance of taking care of that person and dropping them home, just to ensure they don't end up on the boardwalk or at a police station. Now that's bad, for everyone - with no exceptions.
Smoking kills and we all agree on that unanimously. I do know you have an uncle who is 100 years old and puffing his lungs to glory, but still alive and kicking ass. Well, your uncle got genetically lucky but he isn’t a role model for any of us to look up to and try to test our own body’s limits to take the toxic exposure to tar and nicotine.
In conclusion, what’s bad? - It’s context-dependent. But it has higher odds to be perceived similarly by most, if not all. So why not take on avoiding the bad at all costs, the good has to come out eventually. It's inevitable and this formula works like a universal law.
In Food - Avoid junk food, packaged foods, fried stuff, food made with things you can’t pronounce, and sugar-loaded bombs - chances are your body will thank you for it and it will show, in your posture, your physique, and your motor skills.
In Investing - Avoid leverage, complicated strategies, buying on tips, taking risks that you cannot bear the consequences of if the bets go wrong, or dealing with people with low integrity - do these, and chances are good investments will form a decent chunk of your portfolio, and it brings the added benefit of peace of mind and good sleep.
In Relationships - Avoid toxic people, negative talk, gossip or belittling others, backstabbing, or passing judgments - do these right, and you might create a reputation of being a positive person, likable, dependable, professional, and someone who can be trusted at all times.
“People focus on role models; it is more effective to find antimodels - people you don't want to resemble when you grow up” ― Nassim Nicholas Taleb
Every domain has its own set of measures to define what’s good, what’s average, and what’s extraordinary. SVB’s deposit growth was extraordinary, but it made itself vulnerable to interest rate hikes. Many VC-backed start-ups’ revenue growth has been phenomenal, but it was possible because of Zero interest rates where money was cheap and hence available for high rates of cash burn, inspite of a long gestation period to see profits. Building a great physique makes you stand out, but if it came with steroid injections or growth hormones, then biological consequences will always be lurking around the corner.
So chasing good is very dangerous, especially when it’s being gamed for external validation. Hence the framework to avoid the bad, at all costs.
You know what’s bad for you.
Just stop doing it.
It’s not worth the consequences, in case things go wrong.
And they eventually do.
I will let Charlie Munger end this piece with a few pearls of wisdom👇
“Invert, always invert: Turn a situation or problem upside down. Look at it backward. What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead—through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I’m going to die, that is, so I don’t go there.”
Recommendations for the week #
✏️Shane Parish published a post on the Farnam Street blog wherein he shares very thoughtful notes on why one should indulge in writing. Reading is relatively easy, but retaining what you read becomes a herculean task as we are bombarded by truckloads of data on a daily basis, with each new piece of information overwriting what you read just some time back. That’s where writing becomes a medium to be able to absorb the material that you read and that’s important/relevant to you.
📚Not reading or writing is a path of least resistance i.e. default mode for most. And it’s just one example of where many are choosing to avoid the good stuff, only because it’s inconvenient or requires a heavy lift, given the habitual absence of these from your daily routine. If you can relate to this, then I highly encourage you to read Morgan Housel’s post on ‘Path of Least Resistance’. It’s a beautiful read and packed with loads of wisdom, as always.
🎙 My favorite podcast of the week was a conversation between Tim Ferriss and Dr. Andrew Huberman. If you are even remotely interested in the subject of longevity, then this one is a MUST LISTEN. It covers the foundations of physical and mental performance, core supplements, sleep optimization, and so much more.
Welcoming all the new subscribers to this community and I look forward to your continued feedback, suggestions, comments, and recommendations. Please do not hesitate to dm me on Twitter.
I do write about Investing, Human Psychology, and Longevity related topics. I have been debating with the question “Should I lean in on any one subject instead of writing about different topics?” And after contemplating on this, I have figured out that creating an unbreakable future💪🏼 inspires me the most and hence I want to write about topics that make that possible for you and me i.e. nutrition, wellness, relationships, mindset, investing, money, and all topics at the intersections of these.
I may surprise you with topics I write about or the insights I elaborate upon. Irrespective of the choice I make, you can expect each piece to make you richer, wiser, or happier 🤝 That I am confident about and committed to.
Looking forward to the journey ahead with you all 👍🏻