Capital Allocators – Inside the Institutional Investment Industry

Host: Ted Seides
Guest: Morgan Housel, Partner at Collaborative Fund and author
Episode: [REPLAY] Morgan Housel – Same as Ever (EP.359)
Date: October 20, 2025

Overview

In this episode, Ted Seides reconnects with Morgan Housel, acclaimed author of The Psychology of Money and the newly released Same as Ever: A Guide to What Never Changes. Their deep-dive conversation moves from Morgan’s stunning book successes to timeless behavioral lessons in finance, the power of storytelling, compounding, risk, incentives, and how expectations shape our lives—all punctuated by Housel’s memorable anecdotes and thoughtful humility. The episode is particularly relevant to both institutional investors and anyone seeking perspective on enduring human patterns amidst ever-changing markets.

Episode Highlights & Key Discussion Points

1. Morgan Housel’s Journey Since The Psychology of Money

[03:28–06:00]

• Book’s Explosive Success: The first print run was 5,000 copies—considered “a grand slam” in the financial publishing world—but the book has now sold 4.5 million copies within 3.5 years.
  • “Now it sells about 5,000 copies per day... To say it exceeded expectations… We really didn't see this coming.” — Morgan [04:05]
• Impact on Life: Despite professional success, Morgan notes that fundamental aspects of his life remain unchanged.
  • “20% of things have gotten better, 60% have stayed the same, and 20% have gotten worse.” — Morgan [05:07]
• Burden of Expectations: Elevated expectations for future work now pose their own challenges.

2. The Genesis and Themes of Same as Ever

[06:00–09:58]

• Historical Inspiration: Morgan draws from Benjamin Roth’s Depression-era diary to highlight how the emotional and behavioral patterns during crises are timeless.
  • “Change the date from 1932 to 2008… every single word matches.” — Morgan [06:27]
• Focus on Timeless Behaviors: The book aims to shift attention from predicting change to understanding what never changes in human behavior and markets.
  • “Rather than predicting what we think is going to change, let's focus ... on what we know is never going to change.” — Morgan [07:32]
• Book Sales Bet: Ted and Morgan discuss their friendly wager on the new book’s sales— with Ted optimistically predicting over 100,000 and Morgan, mindful of lightning not always striking twice, setting his own bar lower.
  • “Even as an established author, a hundred thousand copies is a mega grand slam.” — Morgan [08:41]

3. The Power of Storytelling in Investing

[10:08–14:48]

• Stories vs. Formulas: Housel’s college experience with a professor who taught through stories shaped his writing style and approach.
  • “People will forget formulas... but a good story will stick with them for life.” — Morgan [10:26]
• Survival as a Writer: Differentiation through storytelling, not numbers, was key to his writing career.
• Ken Burns Analogy: Storytelling drives impact, even when the facts are well known.
• Application in Finance: Buffett’s enduring investor loyalty is partly explained by his exceptional communication.
  • “An underappreciated contributor to his success is ... he’s been such an effective communicator.” — Morgan [12:45]
• Investor Leash: Strong storytellers or communicators can weather bad periods because they generate trust; weak communicators have little margin for error. [15:10]

4. Storytelling Cycles, Markets, and the Nature of Booms and Busts

[16:24–18:30]

• Valuation as Story: Every asset is “a number from today multiplied by a story about tomorrow.”
  • “The story about tomorrow is almost always more powerful than the number from today.” — Morgan [16:35]
• Cyclicality is Inevitable: Drawing on Minsky’s “stability breeds instability,” the pair discuss why market crises recur.
• Normalization of Shock: Even seasoned investors are often surprised by inevitable downturns.

5. Expectations—The Double-Edged Sword

[18:30–23:08]

• Wealth & Contentment: Rising wealth doesn’t deliver increased happiness—expectations move in lockstep (or even faster).
  • “There’s nothing more tragic than a world in which almost everything gets better and you appreciate none of it because you expected all of it.” — Morgan [18:38]
• Practical Takeaway: He personally assumes conservative market returns to manage outcomes and contentment.
• Balancing Ambition and Expectations: It’s possible to retain high ambition while keeping expectations in check.

6. The Nature of Compounding

[23:08–25:43]

• Robert Wadlow Analogy: Growth beyond natural rates in business or investing often leads to breakdowns.
  • “You cannot just compress the natural timeframe... and expect double the results.” — Morgan [24:39]
• Pacing Is Critical: Most investing problems arise from trying to speed up returns.

7. “Tiny and Magnificent”—The Endurance Edge

[25:43–28:07]

• Howard Marks’ Example: Sustainable, above-average performance comes from ‘strategic mediocrity.’
  • “Average returns sustained for an above-average period of time leads to magic, leads to incredible results.” — Morgan [25:52]
• Personal Investing: Housel favors index funds, prioritizing endurance over brilliance.

8. Achieving Duration—The Institutional Investor’s Lens

[28:07–29:54]

• Selecting Investors: The right LPs and structural lockups (like in private capital) support long-termism.
  • “The greatest fund companies ... it’s not the LPs interviewing the fund manager, it’s vice versa.” — Morgan [28:32]
• *“Saying I’m a long-term investor is like standing at the bottom of Mount Everest and pointing to the top and being like, that’s where I’m going.” — Morgan [29:26]

9. Risk: How We Misdefine and Misjudge It

[31:13–34:47]

• Risk Isn’t Volatility: Real risk is the unexpected event that derails results, not everyday ups and downs.
  • “If I expect it to happen, it’s not risk.” — Morgan [31:13]
• Historical Perspective: Once per decade, the world breaks in unpredictable ways: “Covid, Lehman Brothers, 9/11… The biggest risks are never forecast.”

10. Dealing With Probabilities and Predictions

[35:01–37:34]

• Outlier Events: Large numbers fool us; with enough participants, wild outcomes are inevitable.
• Desire for Certainty: People yearn for confident predictions even if they’re inaccurate.
  • “What they want to reduce is the uncertainty... not the actual events.” — Morgan [36:22]

11. Practice of Risk Management

[37:45–39:01]

• Perception vs. Reality: True risk tolerance is only tested during crises, often leading to overestimation of one’s capabilities.
• Bias toward Conservatism: Most should be more conservative than they think.

12. Incentives and Human Nature

[39:11–41:21]

• Munger’s Maxim: Incentives dictate behavior, even morality.
  • “The boundaries of what you are capable of doing ... are not known until you’re factoring incentives.” — Morgan [39:14]
• Examples from History: Social and financial incentives reshape actions, frequently in ways individuals can’t foresee.

13. Outliers and Consensus

[41:21–43:32]

• Unique Wiring: Outlier entrepreneurs (e.g., Musk) are often “tortured” by their internal drive.
• Trade-offs: Exceptional performance in one area likely comes at the expense of something else.

14. Humility, Individuality, and Decision-Making

[44:18–45:37]

• Behavior > Forecasting: A major theme is humility about predicting the future and customizing financial decisions to individual needs.
  • “Let’s stop pretending that we know what’s going to happen next... your personal behaviors and society’s behaviors don’t tend to change that much over time.” — Morgan [44:18]

15. Board Service and Aligning Personal Investing With Corporate Roles

[45:37–47:40]

• Markel Corporation: Explains his admiration and long-term investment in Markel, noting the board’s role is more about governance than day-to-day investing.

16. Lessons Learned From Audience and Success

[47:40–49:31]

• Diverse Impact: Different chapters or passages resonate for different readers based on their life stage and needs.
• Writing for a Broad Audience: Strives for content accessible to both professionals and novices.

17. The Universality of Stories

[49:31–50:24]

• Storytelling as a Connective Tissue: Stories bridge gaps in sophistication and are more likely to resonate across audiences.
  • “If you can tell a story about how people think, that is something that an 80-year-old hedge fund manager will appreciate and a 16-year-old will understand.” — Morgan [49:38]

18. Fame, Anonymity, and Perspective

[51:10–54:28]

• Coolest Outcomes: Access to inspirational people like Howard Marks and observing low-profile ultra-wealthy families living anonymously.
• The Downside of Fame:
  • “You want your name to be famous, but not your face.” — Morgan [53:49]
  • The “grocery store test”: True fame (being recognized everywhere) can make life worse, not better.

19. What’s Next and Deeper Reflections

[54:31–55:26]

• Upcoming Book: The Art of Spending Money—an exploration of using wealth to improve life, delving into spending’s psychological complexities.

20. Personal Insights and Best Advice

[55:33–60:34]

• Self-Reflection: Morgan admits he writes partly as aspirational—who he wants to be, not always who he is.
• Crucial Influences: Calls out early-career mentors John Reeves and Craig Shapiro for taking risks by supporting him.
• Proudest Career Moment: Having his financial hero, Jason Zweig, call The Psychology of Money “the best and most original finance book in years.”
• Best Advice Received: “Write for an audience of one.” Focus first on writing for oneself—authenticity shows.

Most Memorable Quotes

• “People will forget formulas in two seconds, but a good story will stick with them for life.” — Morgan [10:26]
• “Every market valuation… is a number from today multiplied by a story about tomorrow.” — Morgan [16:35]
• “Average returns sustained for an above-average period of time leads to magic.” — Morgan [25:52]
• “If I expect it to happen, it's not risk.” — Morgan [31:13]
• “There’s nothing more tragic than a world in which almost everything gets better and you appreciate none of it because you expected all of it.” — Morgan [18:38]
• “The boundaries of what you are capable of doing… are not known until you’re factoring incentives.” — Morgan [39:14]
• “Let’s stop pretending that we know what’s going to happen next.” — Morgan [44:18]
• “You want your name to be famous, but not your face.” — Morgan [53:49]
• “Write for an audience of one.” — Morgan [59:41]

Timestamps for Key Segments

• Intro and Book Success: 03:28–06:00
• The Timeless Lessons of Same as Ever: 06:04–09:58
• Storytelling in Finance: 10:08–14:48
• Cycles and Market Behavior: 16:24–18:30
• Expectations and Wealth: 18:30–23:08
• Compounding and Endurance: 23:08–28:07
• Building Duration in Investing: 28:07–29:54
• Risk Redefined: 31:13–34:47
• Predicting and Probability: 35:01–37:34
• Incentives and Human Nature: 39:14–41:21
• Fame and Anonymity: 53:43–54:28
• Best Advice and Writing Philosophy: 59:41–60:34

Tone & Takeaways

Morgan Housel’s humility, clarity, and knack for storytelling shine throughout. He urges listeners to shift away from false precision and prediction, and to understand the behavioral constants that underpin human and market dynamics. The conversation is candid, often humorous, and deeply practical—for both personal and institutional investors—on why timeless truths matter more than ever-changing facts.