One-Sentence Summary:

• Probably one of the best books on the psychology of happiness and how we fool ourselves.

Rating On Time Of Review: 

• I think everyone should read right now in the solitude; especially those who seem to be appalled/upset/lashing out at the world for a reason they think is social good but is really something else.

Book notes below. My thoughts are in italics. Opinions are mine during the time of review.

Date Reviewed: June 15, 2020

Chapter 1 - Journey to Elsewhen

“… to imagine is to experience the world as it isn’t and has never been, but as it might be.” / Leading to the idea of “Nexting". It’s an idea where our brain is trying to predict what is will come soon after by looking at the past and present. A kind of default wiring we have to be forward looking. 

Frontal lobe is what makes us think of the future and forecast out by imagining based on our exisitng knowledge of the world. This actually limits our ability to forecast since we have an anchor bias to what we know the world to be.

About 12% of the brain is focused on thinking about the future, and some psychologists believe we'd be happier if we didn't think so much about the future.... so maybe being in flow state is better is preferred because its an insane focus on the present. It would also mean going against our frontal lobe. 

Fear becomes manageable once we feel it is knowable. People who've received 20 big jolts experience less pain than those who get 3 big jolts when the 20 jolts are forseeable given what they know of the past. It's like the "thickening" of the skin for investors who've experienced numerous market crashes. 

Humans naturally want control and loss of it leads to hopelessness, depression and sadness. This plays into the default of wanting to know the future and willingness to pay to know the future (i.e. stockpickers, weather forecasters). The negative emotion gets magnified when we experience an illusion of control from a random event, to have the random event play out to a different result from the past. The fact remains that we are wired to find ‘exercising control’ to be gratifying. 

“… humans beings come into the world with a passion for control..”

**“Apparently, gaining control can have a positive impact on one’s health and well-being, but be worse than ever having had any at all.” / Plays into the value of autonomy and ownership being fundamental qualities in companies. 

Chapter 2 - The View from in Here

“Subjectivity: The fact that experience is unobservable to everyone but the person having it.”

Emotional Happiness: Subjective to only the one who experiences it (i.e. the smell a lover's shampoo). Can only be defined in relativity to previous experiences. What is important is to experience it.

Moral Happiness: About the result of the life well-lived. If what you did served the good of the world and society then you should be happy. A-la burning monks and martyrs.

Judgmental Happiness: You are not happy about going to an event (emotional) but it makes your spouse happy so you are happy for em (judgmental)

**It seems that the emotional one would be the most truest form and the one that matters the most. Because it's about what you are experiencing. So, if Tom did a lot of good deeds for the world but tragedy struck him and he was unconscious till death then he will not be happy. Because it doesn't matter what results you created to better or worsen society. He may have been happy when he was experiencing the deeds (if he truly was doing that which he enjoyed) but all the people giving him accolades for deeds when he is unconscious won't mean anything to him because he is unconscious.

**Experience Stretching - "Not knowing what we're missing can mean that we are truly happy under circumstances that would not allow us to be happy once we have experienced the missing thing.” / Hence, it's all relative to the subjective experience set. The point is that not knowing you are missing out can keep you happy (i.e. ignorance is bliss). So, the more you experience, the more you have things to compare with. A hotel in New York may have been a 7/10 experience. But going to the Marina Bay Sands in Singapore makes that a 9/10 and the comparative New York hotel when you go back to it becomes a 5/10. 

Chapter 3 - Outside Looking In

We can be wrong about our emotions. When we experience "fear" from activities that are adrenaline-filled it shoots out the same chemicals for attraction so if you do something fearful with someone else you may feel attraction to them but that may not have happened had you not been skydiving together. It's a lowering of your inhibitions.... or more so the confusion of it. Hence, romances in war-stories or adventures may actually happen quickly given the heightened emotional state the individuals will be in. 

Considering that trusting previous experience sets will be a relatively (obviously imperfect) good way of measuring happiness, the POV of the real-time report of the attentive individual would be the least flawed. So, not just experiencing it but being "present" to experience it will aid greatly in measuring ones own happiness. It's about being conscious. 

As one experiences more in a conscious state, most of the time she will be "right" about whether the experience makes her happy or not. So, an environment rid of distractions to allow for ‘present-ness’ can make the System 1 (i.e. Self 2, gut instinct) more accurate. 

All a long way of saying: If someone tells you they are happy. They are probably correct. 

Chapter 4 - In the Blind Sport of the Mind’s Eye

Founder of Kodak, George Eastman, developed a revolutionary management philosophy of giving his employees shorter hours, disability benefits, retirement annuities, life insurance, profit-sharing, and one-third of the stock in his company. All this in the 1920s.

“….the shortcoming that causes us to misremember the past and misperceive the present is the very same shortcoming that causes us to misimagine the future.” / applicable in decision making. Most decision making is based on desiring one result over another. That future desired outcome drives decision making. 

“….the mistake we make when we momentarily ignore the filling-in trick and unthinkingly accept the validity of our memories and our perceptions is precisely the same mistake we make when we imagine our futures."

Chapter 5 - The Hound of Silence

**“….when the rest of humankind imagines the future, it rarely notices what imagination has missed - and the missing pieces are much more important than we realize.” / It’s looking at what isn’t there. Inversion. Like in Sherlock Holmes where a racehorse was stolen and everyone thought it was some outside thief but Sherlock noted how the guard dog did not bark. The absence of a bark signified the thief was someone the dog knew. I wonder how one can intuitively notice what is missing/absent…

People are willing to accept instances of miracles to times it "worked" but no one asks for the times praying for the miracle didn't work when counteracting it. It’s like priests saying “look at all the believers of God who survived” but doesn’t show the 90% of the believers who perished. Same for investing…. Which brings forth the idea of base rates. 

**"When we are selecting, we consider the positive attributes of our alternatives, and when we are rejecting, we consider the negative attributes.” / You'll select options that is outstanding at something though it's got horrible other traits. An optimistically oriented bias. I wonder if that is prevalent for investors who buy stocks… they will forgot the negatives and overweight the positives. Turns out, if that same option was preselected for you, you would reject that same option and keep one that is merely average all round. Because if you don’t get to ‘choose’ it yourself (exercising control) then you will ignore the positive and weigh the negative as rejection (or to not reject) is considered the only decision. 

"When we think of events in the distant past or distant future we tend to think abstractly about why they happened or will happen, but when we think of events in the near past or near future we tend to think concretely about how they happened or will happen.”/ distant predictions will be abstract descriptions whereas the activity tomorrow will be step by step.

Turns out, when people think about getting money in the short-term, their pleasure center is triggered and they are extremely excited. But, if the monetary reward is for a far off future, their pleasure center is not triggered. Innate wiring to be short-term oriented. Our brain will choose to fill in details it wants and leave out details it doesn’t want.

Chapter 6 - The Future Is Now

Even Wilbur Wright told his brother in 1901 that man wouldn't fly until 1951 but he made it happen by 1903. We are not good at forecasting. Probably because of a bias towards relating to the present. Scientists and experts alike are often wrong by predicting that the future will be too much like the present

“If the past is a wall with some holes, the future is a hole with no walls. Memory uses the filling-in trick, but imagination is the filling-in trick, and if the present lightly colors our remembered pasts, it thoroughly infuses our imagined future.” / We merely patch holes for the past but the present is some blank canvas for the present to vomit on.

If visual perception accounts for the visual experience and emotional experience from objects and events in the present moment, visual imagination creates a visual experience and emotional experience from memory. One we know is fraught with errors. But everything seems to be rooted to our ‘vision area’. 

**"When people are prevented from feeling emotion in the present, they become temporarily unable to predict how they will feel in the future." / individuals who chose to make a decision based on their gut feelings for what would make them happy ended up being happy in the future with their choice compared to those who were told to think about it as they ended up overriding the gut feeling to satisfy what the "external" people would approve of as the "correct" decision. Making choices with ’Self 2’ prevails over the externally driven ’Self 1’ that will rationalize a decision because it wishes to appease the external world. They will pick careers that parents/career counselors will approve of, investors will buy stocks their peers will approve of… and not the ones they genuinely feel something for because of an insight that is unique to them and not to their peers. 

**“...because our brains are hell-bent on responding to current events, we mistakenly conclude that we will feel tomorrow as we feel today.” / Its the inability to think of each day as a new day with a new slate. It brings in the baggage from the past. At the most micro level, it’s the same with playing a sport like tennis. A bad serve from the previous set should not impact your next serve because they are independent events but the ’Self 1’ tells you to think about that and it will impact the future events as a result. This is a key bias to keep in mind. 

**"Each of us is trapped in a place, a time, and a circumstance, and our attempts to use our minds to transcend those boundaries are, more often that not, ineffective…..we think we are thinking outside the box only because we can’t see how big the box really is. Imagination cannot easily transcend the boundaries of the present; and one reason for this is that it must borrow machinery that is owned by perception." / it's limited by what we've perceived (i.e. events and objects of past and present). So, the more you "perceive" the wider your box of imagination will become. Those who boast or tell you to think outside the box are rather indicating their own ego in believing they can transcend the box. They are not aware that their limited experiences will limit their imagination. Those with lots of experiences will tell you the box is massive so just explore that. 

**This puts what Peter Thiel talks about to merit. Thiel asks himself how he could achieve his 10-year goal in 6 months. This makes a lot of sense given how our 10-year goal is really imposing our desires/beliefs in the present to the future. But it really is something we are focused on in the present, not something ourselves in 10 years time actually wants. 

Chapter 7 - Time Bombs

**As we experience something, the amount of pleasure it yields declines over the successive occasion. "Psychologists call this habituation, economists call it declining marginal utility; and the rest of us call it marriage."

**Combat habituation with 1) time 2) variety; you only need one or the other. Do something less frequently to keep it exciting or change up how/what you are doing. Variety, when episodes are spread out a lot, can be costly as double variables may not increase pleasure but make it less pleasurable (i.e. the person who rarely goes to the gym but does something random every time). Variety is also the model for strength development. It’s the introduction of new but similar stresses that compound development. It’s a simple model for the development of any skill. Rather, a blueprint for growth. Time (spacing things out) merely keeps things ’novel’ but it does not make the ‘habit’ develop. It’s like those who wish to make travel ’novel’ vs. those who wish to grow/develop their skills as travelers. 

Most people think in percentages instead of absolutes. That's why people don't think about a 1% fee when it can be costing them $1000s but get obsessed with saving 50% on $3 toiletry.

People attach memories to commodities and that impacts their perception of loss and opportunity cost. If you had a concert ticket ($20) and a $20 bill and you lost the concert ticket on the way, you would not buy a new concert ticket. But, if you had two $20 bills and you lost one you would still buy the concert ticket as there was no prior memory of having had a concert ticket. The correct approach should be to always ask whether the $20 will bring more joy on this experience or another. To look at each activity independent of what happened in the past. To look at each activity in the present. 

**Our approach on opportunity cost is anchored by the "starting point". Stores will have super expensive items as an anchor to make other items look like a bargain. This can also be a model for goal setting. We often end up close to where we start so I imagine that makes ‘aiming high’ for a goal to be all the more important. There is also the marketing tactics of putting expensive items next to ’not as expensive’ items to make it seem like a better deal/value. Like how real estate agents will show an outrageously expensive house first then something that is only slightly expensive but looks better so you get anchored on the “starting point”. 

“…the comparisons we make have a profound impact on our feelings, and when we fail to recognize that the comparisons we are making today are not the comparisons we will make tomorrow, we predictably underestimate how differently we will feel in the future.” / the sunglasses you love in the story are only so because you compare it to your old ones… but after you buy those… their shine will lose appeal. Especially if you had not purchased it with preset specific attributes. Most times, if you don’t know what you are specifically looking for and what matters before you buy something… you will end up comparing useless attributes that the stores make you look at. 

**”As much as we all despise racism and sexism, these isms have only recently been considered moral turpitudes, and thus condemning Thomas Jefferson for keeping slaves or Sigmund Freud for patronizing women is a bit like arresting someone today for having driven without a seat belt in 1923.” / Amen. This world needs to be able to comprehend this. 

Chapter 8 - Paradise Glossed 

“Rationalization - the act of casting something to be or to seem reasonable.” / The more I learn about psychology… the more I believe those who believe they are rational have their head so far up their own ass to believe they are not merely a victim of wanting to feel good about themselves all the time. 

**“One of the reasons why most of us think of ourselves, as talented, friendly, wise, and fair-minded is that… the human mind naturally exploits each word’s ambiguity for its own gratification.” / When given a chance to ‘define’ talent, friendly, wise etc… to our “own” definition, we will give it a definition fitting us and that is why everyone will rate themselves as amazing when given a chance. They genuinely believe it to be the case. Even if you are humble and say you are 6/10 on your own definition, someone who uses your definition will be 3/10 because you would’ve set definitions that were just so impossible. 

When a potential experience becomes actual, we will find ways of liking it more. Having a job offer will make you want the job more, getting accepted to a university will make you want to go to it more. You will validate your choice and also inflate the opportunity.

“Apparently it doesn’t take much to convince us that we are smart and healthy, but it takes a hole lotta facts to convince us of the opposite.” / Same goes for our beliefs. If we think someone is likable or should be smart… then we will be fine with the bare minimum evidence but if we believe the opposite of a person, then we won’t be satisfied even with a mountain of evidence. We will still doubt. That’s how strong our biases are

Chapter 9 - Immune to Reality

“.. Nine out of 10 people expect to fell more regret when they foolishly switch stocks than when they foolishly fail to switch stocks, because most people think they will regret foolish actions more than foolish inactions. But studies also show that nine out of 10 people are wrong. Indeed, in the long run, people of every age and in every walk of life seem to regret not having done things much more than they regret things they did, which is why the most popular regrets include not going to college, not grasping profitable business opportunities, and not spending enough time with family and friends.” 

“Because we do not realize that our psychological immune systems can rationalize an excess of courage more easily then an excess of cowardice, we hedge our bets when we should blunder forward.” / If we hedge, we will regret it harder than the relief from not hedging. In essence, we will be happier having taken the chances than not. That is the regret minimization framework. We are biased to think we will regret being wrong from actually taking the chance…. But we actually regret not taking the chance. Which is quite fascinating because one of the key teachings in investing is to do nothing but a path to no regret may be helped a system of doing small things. Things that may not materially impact your investing but is enough of ‘doing’ to minimize regret. 

The more an experience hurts, the more positively we will remember it. Like how I remember my worst consulting projects most fondly. People will value their time at war more than others, value clubs with the most painful invitations more etc… The harder something is to get, the more we think its valuable. Same thing can be inferred to affection, like choosing someone who teases you over the ‘nice guy’. 

In the case of negative experiences, explaining it away (details help) and noting why the trauma/bad experience happened will greatly improve your well-being. This is where rationalizing can help one overcome trauma. 

Chapter 10 - Once Bitten

“..infrequent or unusual experiences are often among the most memorable.” 

“Because we tend to remember the best of times and the worst of times instead of the most likely of times, the wealth of experience that young people admire does not always pay clear dividends.” 

Chapter 11 - Reporting Live from Tomorrow

“… a false belief - that increases communication has a good chance of being transmitted over and over again. False beliefs that happen to promote stable societies tend to propagate because people who hold these beliefs tend to live in stable societies, which provide the means by which false beliefs propagate.” / probably a contributing factor to the destabilization of stable societies. 

**”Adam Smith, the father of modern economics, wrote in 1776: “The desire for food is limited in every man by the narrow capacity of the human stomach; but the desire of the conveniences and ornaments of building, dress, equipage, and household furniture, seems to have no limit or certain boundary.” / people seem to ignore diminishing returns of utility

“In short, the production of wealth does not necessarily make individuals happy, but it does serve the needs of an economy, which serves the needs of a stable society, which serves as a network for the propagation of delusional beliefs about happiness and wealth. Economies thrive when individuals strive, but because individuals will only strive for their own happiness, it is essential that they mistakenly believe that producing and consuming are routes to personal well-being.” / the super-replicator is the societal belief of "wealth to consume to be happy”.. which is a false propagation that can only exist in a stable society (first world). 

Another super-replicator is the belief that children bring happiness. It’s another false belief assumed by society. Studies have shown that married couples are at peak happiness pre-children and after the children leave the nest. The lowest point is when the kids are teenagers. People have merely transmitted the idea that is believed to be true but is untrue. Its a false belief required to keep them going.

We consider ourselves to be very special. We have an innate view that we are unique. If a task is perceived easy (i.e. driving), we assume we are always above average. If a task is considered difficult, we consider ourselves below (i.e. chess). Although we might make choices that don’t reflect our values, when we see someone else makes that same choice we believe that reflects their values. Hence, we are always unique. When we are seen as similar to another, we will do whatever we can to look different. I bet race and gender are easy ways people use that as a proxy to make themselves feel special. This is also what stops us from learning from the experiences of others. Because we consider ourselves to be so unique.

Disclaimer - I’m writing this for myself. For my past, present and future self. Much of what I write is my opinion. If it somehow ignites agreement in you then great, I’d love to hear about it. If it sparks disagreement in you, don’t reach out because I don’t care for it. There always are obvious exceptions and the flawed person in me hasn’t considered them all.