A Better Portfolio Starts With Better Mental Health

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In last week's letter I discussed the unavoidable necessity of trial and error. Humans have not gone anywhere in a straight line - businesses innovate because others fail, and science progresses one funeral at a time.

In a weird way - what kills me, makes you stronger. If I eat the poison berry, you probably won’t.

The purpose of the letter was to argue that we never know which way to go. We find better directions by eliminating the worse ones.

‘Trial and error.’

The success of our lives is based on how aggressively we pursue this trial and error pattern. Any motivational book or “business guru” will tell you about the value of failing fast and moving forward. But what if there is a smarter way to fail?

People always ask me how the best investors pick winning stocks. I can tell you after interviewing over 500 top performing professional investors that they do not pick winners - they avoid losers. What makes them exceptional is their ability to eliminate the bad choices - increasing the probability of a winner remaining on their desk.

They don’t pick winners, they eliminate losers.

I don’t pick stocks everyday, but everyday I am faced with decisions. The exact same rules apply.

It is impossible to know what the right choice is when our lives are filled with unknown and uncontrollable variables. A successful life is not about making more right choices, it is about making less bad choices.

How do we do this?

I have become obsessed with the psychology of decision making, the algorithm of intuition, and the seductive nature of bad ideas.

Today I want to share the most important conversation I had in 2021.

My guest was the Professor of Psychiatry at Stanford University School of Medicine, Chief of the Stanford Addiction Medicine Dual Diagnosis Clinic, and author of Dopamine Nation, Dr. Anna Lembke.

Dr. Lembke has been a featured guest on The Joe Rogan Experience, The Wall Street Journal, TIME Magazine, FOX News, CNN, GQ, The Guardian, Forbes, Vogue, and dozens more of the biggest media outlets in the world.

A better life, better decisions and a better portfolio, all start with better mental health.

Dr Anna and I discuss the surge in behavioral addictions that are eating our mental bandwidth - our emotional reactions to pain and pleasure and the dopamine dance that our minds do everyday.

Dr. Anna argues that social media platforms have turned human connection into a drug and offers advice to parents raising youth in this age of relentless media and technology consumption.

This was a very important conversation, I hope you give it a watch or listen.

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