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Good Things Taken Too Far

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Good Things Taken Too Far

Morgan Housel

Penicillin is probably the most important discovery of the last 100 years. It’s saved somewhere between 80 million and 200 million lives. Your great grandparents would have found it indistinguishable from sorcery.

But when it first came to use its discoverer, Alexander Fleming, saw a problem: Antibiotics were so good that people would want to take them all the time, and taking them all the time could backfire as drug-resistant bacteria adapted and proliferated. He

in 1946:

the public will demand [the drug and] … then will begin an era … of abuses. The microbes are educated to resist penicillin and a host of penicillin-fast organisms .. can be passed to other individuals to others until they reach someone who gets septicemia or pneumonia which penicillin cannot save. In such a case the thoughtless person playing with penicillin treatment is morally responsible for the death of the man who finally succumbs to infection with the penicillin-resistant organism. I hope the evil can be averted.

It wasn’t averted. It’s exactly what’s happened.

Drug-resistant bacteria

have surged
so much that the U.K.
has revised down
future life expectancy. The U.N. thinks drug-resistant bacteria caused by the overuse of antibiotics
could kill
10 million people a year by 2050, reversing the lives saved since penicillin came into use in 1945.

Good things can be taken too far – helpful at one level and destructive at another.

They can be more dangerous than bad things, because the fact that they’re good at one level makes them easier to rationalize at a dangerous level. Doctors who overprescribe antibiotics think they’re doing good in a way people selling meth don’t.

A lot of things work like that, don’t they?

Good things – praise-worthy things – that in a high enough dosage backfire and become anchors?

A few I see in investing:

1. Contrarianism is great because the masses can get it wrong. But constant contrarianism is dangerous because the masses are usually right.

Identifying and avoiding times when millions of people have been

derailed by
bad incentives and a viral narrative is a wonderful thing. Most investment fortunes come from a bout of contrarianism. Same in business: name a star, find a contrarian.

But a larger group of investors has turned contrarianism into something closer to cynicism. Their contrarianism is constant – at all times, for all things.

They’ve never met a news story they didn’t want to take the other side on, particularly when it means betting against people who are doing well.

Stocks rise 2%: bubble!

Economy grows: we’re due for a recession.

Tech stocks trade at higher valuations than industrials: I’ve seen this movie before and it doesn’t end well.

It’s done with good intentions. They think they’re being wise contrarians. But their cynicism leaves them consistently behind, which compounds into bitterness as the world progresses without them.

The quirk is that if you survey the list of extraordinarily successful investors, entrepreneurs, and business owners, virtually every one has been a contrarian. But none – not a single one – is always a contrarian.

There’s a time to bet against mass delusion, and (more frequent) times to ride the progress that comes from billions of people collectively searching for truth.

2. Optimism is great because things get better for most people over time. But it’s dangerous when twisted into the belief that things will never be bad, which is never the case.

I believe people will solve big problems over the next 20-30 years in a way that creates real value for both society and investors. Life will get better for most people. They’ll be wealthier, smarter, and more productive. The list of things that would cause me to change that view is short.

That makes me an optimist.

But the path between now and then will be filled with chaos, setback, ruin, embarrassment, agony, anguish, fraud, injustice, and disbelief. The list of things that would cause me to change that view is blank.

Optimism vs. pessimism isn’t black or white. You can believe things will get better in the long while being a mess in the short run. That’s the right stance.

But it’s hard. It’s easier to pick a side.

A lot of people pick optimism because they rightly, correctly, get excited about the long history of progress mixed with confidence in their own skills.

But when optimism is taken so seriously that it assumes things will never be bad – that every period long or short will work out in your favor – it turns into complacency. It encourages leverage and promotes denial. It leaves you without backup plans. Worst, it causes you to wrongly second-guess your long-term optimism when faced with an inevitable setback.

You can be right about optimism in the long run but fail to ever see it because you overdosed on it in the short run.

3. Being open-minded is great because truth is complicated. But being too open-minded backfires because objective and immutable truth exists.

If you’re not open-minded you live in the tiny bubble of whatever you’ve happened to experience in life.

But author Daniel Okrent once showed how it goes too far. He

wrote on
the problem of journalists giving equal weight to fringe views with little evidence in the name of balance, which can give fringe views credibility and cause imbalance:

The problem is real, and pervasive, and getting more complicated. As fewer and fewer news media stake a claim on being impartial, those that do are more and more inclined to cover their asses with the “on the one hand, on the other hand” trope. Depresses the hell out of me.

Non-journalists do this, too. They do it innocently. They smartly – correctly – try to be open-minded by seeking out a range of views. They’re driven by the principle that truth is complicated. They fight confirmation bias by seeking out opposing views.

And then they get lost in a rabbit hole, paralyzed by contradictions.

The legal field has a thing called Gibson’s law. It says, “For every PhD there is an equal and opposite PhD.” Any argument in any field can be backed up by an expert armed with data.

Every smart attempt to be open-minded has to be accompanied by a strong nonsense detector. The detector should go off when any of a

handful of laws
are violated, when the author’s incentives favor an outcome, and when a complex answer is given if a simple one would suffice.

You have to be firm enough in your views to make confident decisions while being open to new views in a way that lets you occasionally update and change those decisions. “Strong beliefs, weakly held” as they say.

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Key Ideas

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Too Much Of A Good Thing

Too Much Of A Good Thing

Good and effective things are helpful at one level but when taken too far, can be destructive.

In 1946, Sir Alexander Fleming, a renowned microbiologist, stated that antibiotics (like p...


Taking The Opposite View

  • In the field of investing, Contrarians take the opposite view, akin to cynicism, and think of the collective mainstream view as a kind of mass delusion.
  • Occasionally, a contrary v...


Balancing Optimism

  • A positive attitude has the power to change our thinking and facilitate good things in our lives. Optimism surely beats pessimism as a worldview, when one has to pick a side.
  • Too m...


Being Open-Minded

  • As truth is complicated in this day and age, being open-minded takes us out of the bubble we develop around us, based out of our good and bad life experiences.
  • Being too open-minde...



Antibiotic resistance

Antibiotic resistance

Antibiotics may lose their ability to treat bacterial infections.

Scientists have been warning us about the alarming rise in drug-resistant bacteria, but it can be curbed.


  • Penicillin was the first widely-used antibiotic. It was discovered in 1928 by Alexander Fleming, a bacteriologist.
  • He noticed that the staph cells he'd been studying in a petri dish had died, and an unusual mold was growing in it.
  • The mould was purified and tested in 1940, and later mass-produced.
  • By 1943, the US was supplying all the Allied forces with this miracle drug, which gave them an advantage in treating injuries.

Existing antibiotics found in the dirt

  • An agriculture student-turned-microbiologist, Selman Waksman, tested 10,000 soil samples over the years.
  • In 1943, he identified streptomycin, a broad-spectrum antibiotic effective against tuberculosis.
  • Drug companies caught on to it, and commissioned pilots, explorers, and foreign correspondents sent back soil samples as they traveled, collecting dozens of new antibiotics.
  • By 1970, researchers found themselves discovering the same molecules over and over.

7 more ideas

Some downsides are unavoidable

Some downsides are unavoidable

Life is a little easier if you expect a certain chunk of it to go wrong no matter how hard you try.

Smart people screw up. Good people have bad days. Nice people lose their temper....

How we think about risk and opportunity

It’s impossible to think about risk and opportunity without a reference point. And ours is at most incomplete (if not totally wrong).

Everything we think about risk and opportunity is shaped by our own specific situation and personal experience. So everybody has a view of risk shaped by narrow experiences but applied to the broad world.

Long-term and short-term thinking

Long-term thinking is difficult to put in action because the long run is a collection of short runs that have to be handled, displayed, and used as information to gauge whether a long-term reward still exists.

Short-term thinking can be the only way you’ll survive long enough to experience long-term results.

one more idea

The placebo effect

The placebo effect

The placebo effect happens when a person takes medication that he thinks will help, but the medication has not been proven to be effective for the specific condition.

The subject-expectancy effect

When people know what the result of taking a pill is supposed to be, they might unconsciously change their reaction to cause that result or report that result has taken place even if it hasn't.

However, studies show that a placebo doesn't trick the brain - the brain reacts differently to a drug than a placebo. A 2004 study showed that the expectation of pain relief causes the brain's relief system to activate.

Placebos in research

Placebos are often used in clinical drug trials to determine how well a potential medicine will work.

  • There are two different groups of subjects in a placebo-controlled trial - one receives the experimental drug and the other the placebo. Neither researchers nor subjects know which group is receiving the real drug or the placebo.
  • Some researchers are questioning the placebo-controlled trial. Not everyone thinks a drug is ineffective if the placebo performs better.
  • Other critics of the placebo-controlled trial state it's wrong to attribute all positive outcomes to the placebo because many illnesses can resolve without any treatment.
  • When a patient takes a placebo and experiences adverse side effects, it's called a nocebo effect. Patients taking active drugs have also been known to have side effects that can't be directly attributed to the drug.

2 more ideas

Western vs. Mediterranean diet

Western vs. Mediterranean diet

Western diet, typically high in animal fat and protein and low in fibre, increases the risk of cancer. The Mediterranean diet is high in fibre and low in red meat and has be...


There has been a lot of hype around the health benefits of prebiotics and probiotics in recent years, but while they're increasingly used in treatments including inflammatory bowel diseases such as Crohn’s disease and ulcerative colitis, several reviews suggest there needs to be further research on which strains and dosages are effective. Recent studies have found some people are even immune to probiotics.

Gut microbiota

Gut microbiota has a major role to play in the health and function of the GI tract, with evidence that conditions such as irritable bowel syndrome (IBS) often coincide with altered microbiota. But it also plays a much wider role in our health, and this is largely determined in the first few years of life.

2 more ideas

Recessions come and go

Recessions come and go
  • A recession is "good" or "bad," depending on who it impacts and how badly it affects them.
  • In the last thirty years, a recession has come and gone somewhere in ...

Recessions are far from equal

  • Banks are better able to handle a financial crisis than a decade ago. The 2008 recession was about the housing market and shares, which affected higher income groups.
  • The present crisis seems to be hitting the lower-income groups, the vulnerable workers, young, and less skilled. It is similar to the late 70s, early 80s recession, which affected young and unskilled workers.
  • Another lesson from 2008 is that recessions don't always lead to significant numbers of job losses. Layoffs were concentrated among a small number of people, and they stayed unemployed for a long time.
  • In this recession, far more workers will be at risk if social-distancing rules remain in place over a long period.

GDP during a crisis

  • A drop in GDP was expected during the 2020 lockdown. Shops and businesses were closed, and the total value produced by goods and services decreased. In turn, this affected the staff of those businesses earning less money.
  • Furloughs. At its peak, about nine million people in the UK were paid a furlough - the government paid 80% of their salaries, and the employer could choose to top up the rest. Other countries have similar state-backed furlough schemes. These schemes will be coming to an end, and employers will have to decide if they have to lay off employees permanently.
  • The losses are not yet crystalising. People are taking mortgage and credit holidays. It means the losses are pushed further down the road. The financial sector bubble will burst, and we will see real turmoil again.

3 more ideas

The Lessons Of History

The Lessons Of History

History is a treasure-house of learning, and as many books teaching us lessons from history point out, what was true in the medieval ages is often true even now, though the circumstances, technolog...



“History never repeats itself, but man always does.”

1920 and 2020

1920 is a hundred years apart from 2020, yet how people think is largely unchanged. Human behaviour is still hinged on greed, fear, opportunity, scarcity, and basic instincts.

We have no idea what will happen in the future, but we do have a good idea about how human beings might behave in certain situations.

6 more ideas

Being A Great Listener

  • Focus on what’s being said instead of how it affects you or what you want to say.
  • Put away your phone. It’s rude and multitasking takes away from comprehension.

Listening influences up to 40% of a leader’s job performance

Beyond the spoken words, the tone of voice, body language, and what isn’t said also convey valuable information.

But most people overrate their listening skills. 

Alfred Brendel

Alfred Brendel

“The word listen contains the same letters as the word silent.”



Grumpiness can be defined as a bad mood that tends to last from several hours to a few days.

What we can not really explain is why we are grumpy: there is usually no reason which we ca...

What causes grumpiness

Grumpiness can be caused by many factors, among which:

  • An unfulfilled psychological need: one way to avoid this is by clearly expressing your needs and, eventually, taking some actions in order to accomplish them.
  • An unrealistic high expectation: make sure you check your expectations on a regular basis, so you can always have realistic and achievable ones.
  • The lack of self-compassion: if you have a negative attitude towards yourself, you are most likely going to feel at least grumpy.


Meta-grumpiness can be explained as the fact of being grumpy because you are grumpy.

Once you have noticed that you are feeling grumpy, this makes you feel even more grumpy, as you tend to become critical of yourself being grumpy.

2 more ideas

Qualities of Charismatic Leader

  • They are skilled at articulating a compelling vision that inspires followers.
  • They read the environment and sense the needs of followers to tailor a message that will hav...

From positive to negative

5 phases that take place as a leader’s charisma shifts from a positive to a negative quality:

  • The first phase is characterized by the subtle sense on the part of followers that the leader does not want to be questioned.
  • The second stage: sensing the leader's diminished appetite for being questioned or challenged, followers begin to self-censor, asking fewer questions and no longer playing devil's advocate.
  • The third stage: a negative cycle in which compliments and agreement cause leaders to become overconfident. Leaders in this stage create their own sense of reality and become resistant to evidence that they may be incorrect.
  • The fourth stage: Since the leader's views and actions are the only ones that matter, followers reduce their willingness to be proactive. They wait for directions and become passive. Decision making slows down.
  • The fifth stage is characterized by people continuing to follow and ostensibly do only what is necessary but with a deep diminishment in enthusiasm and spirit.