Weekly Question & Framework: September 22, 2023

Hello and welcome to the Curiosity Chronicle Weekly Question and Framework. In three minutes or less, I will give you one question and one framework to leave you thinking going into the weekend. Without further ado, let's dive right in. A Question on Long Term Investments what would you invest in today assuming you had to hold the investment forever? Short term thinking is abundant. Long term thinking is rare. Those who can think long term will always stand out and find a way to win. Whenever I find myself wandering, I use this question to center my thinking. What would I invest in today and happily hold forever? These are the things I want to focus on because they are all long term in nature. Some of my answers for my forever Investments Purpose Driven Work Investing and building my personal platform is a forever hold for me because it will allow me to reach and positively impact millions, maybe even billions of people in my lifetime. That is my higher order purpose to help people live healthier, wealthier lives. Relationships Investing in my relationships with my son, wife, family and close friends is a forever hold for me because these are the people that I want to live my life with. Physical Health Investing in my physical health by exercising, eating well and sleeping is a forever hold for me because I don't want to regret allowing my body to atrophy when I'm older. What I've found when I focus my energy on my forever hold investments on a daily basis, my life feels in flow. What are your forever holds? How can you focus on them daily to reap the rewards forever? A Framework to Avoid Reality Survivorship Bias During World War II, the US wanted to add reinforcement armor to specific areas of its planes. Analysts examined returning bombers, plotted the bullet holes and damage on them, and answered that adding armor to the tail, body, and wings would improve their odds of survival. But a young statistician named Abraham Wald noted that this would be a tragic mistake. By only plotting data on the planes that returned, they were systematically omitting the data on a critical informative subset, the planes that were damaged and unable to return. The seen planes had sustained damage that was survivable. The unseen planes had sustained damage that was not. Wald concluded that armor should be added to the unharmed regions of the survivors. Where the survivors were unharmed is where the planes were most vulnerable. Based on his observation, the military reinforced the engine and other vulnerable parts, significantly improving the safety of the crews during combat. Wald had identified a cognitive bias called survivorship bias, the error resulting from systematically focusing on survivors and ignoring casualties that cause us to miss the true base rates of survival. The actual probability of success and arrive at flawed conclusions. We see survivorship bias all around us. We read books on all the common traits of successful people, but fail to consider all of the unsuccessful people who possess those same traits. We applaud the belief when we hear that an entrepreneur took out a second mortgage and succeeded, but fail to consider all of the entrepreneurs who did the same and went bankrupt. When we fail to consider the range of outcomes and the hidden evidence, we develop a skewed and often incorrect view of reality. It cannot be avoided altogether because the vast majority of books in history are written by and about the survivors and victors. But wherever possible, consider the unseen evidence. What is unseen often has just as much value as what is seen. That's all for today. I hope you enjoyed it, I hope you learned something, and I hope it got you thinking. As always, until next time, stay curious, friends.