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* To make higher than average returns, embrace being uniquely wrong


This is one of the most important investment lessons I have come across in different business or finance contexts. If you want to make higher than average returns, you have to be contrarian and open to be wrong very frequently.

If you only do what is normal in your industry or profession, you will get the results everybody is getting: average results. Getting high performance results require going against the conventional wisdom.

* The only valuable things are the worthless things. The things that seem valuable to everyone are actually less valuable because their value is amplified via mimetic feedback loops. The things that seem worthless are actually where the real value is.

Betting on "worthless" things is not as bad as you think. Being uniquely wrong protects you from the downside risk, because everybody thought you were crazy anyways, so the failure was already priced in. However, if you are right, that means you will have massively compounding returns.

This advice is extremely difficult to execute. It requires thinking independently. It requires having a diversity of cognitive perspective relative to everybody else you are competing against. It requires emotional maturity to accept that you will be wrong most of the time, but you only need to be right once anyways.

Quotes on being contrarian

If you are going to do anything new or innovative, you have to be willing to be misunderstood. If you cannot afford to be misunderstood, then for goodness' sake, don't do anything new or innovative. quote Jeff Bezos innovation unreasonable

Whenever you find yourself on the side of the majority, it is time to pause and reflect. Mark Twain quote contrarian

The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. quote contrarian

I will tell you how to become rich… Be fearful when others are greedy. Be greedy when others are fearful. Warren Buffett quote contrarian

If shoe shine boys are giving stock tips, then it's time to get out of the market. Joseph Kennedy quote contrarian

It's actually pretty easy to be contrarian. It's hard to be contrarian and right Reid Hoffman quote contrarian

When everyone agrees with you when you make a decision, you get paid linearly. When everyone agrees with you after the fact, you get paid exponentially. Shane Parrish quote contrarian

The majority is always wrong, and the minority is rarely right. Henrik Ibsen quote contrarian