Booms, Busts, And Seeding The Future

“Booms plant the seeds of busts. Busts do the same in the opposite direction.” – Morgan Housel, “We’ll Get Through This

A few months ago everything was Ok, looking forward. Now we know everything was not Ok, in hindsight. We can beat up and torture our judgment of events all we want, what matters is what we can learn and what we can apply.

The scary part about planting seeds when everything is going well is that at some point things will start going poorly. The exciting part about planting seeds when things are going poorly is that at some point things will start going well (eventually). The problem is easy to spot – planting seeds when times are great feels exciting and planting seeds in busts feels scary.

It’s a classic psychological mismatch. Boom times give us the confidence to plant more seeds. In busts, we all feel like idiots, that we should have seen this coming, and we wonder if we can trust any of the decisions we are about to make – let alone decide to plant new seeds.

There are three things we can do with booms, busts, and planting cycles:

  1. Recognize that everyone is feeling some version of the same joy or pain in the corresponding booms and bust. We can’t be better unless we’re first willing to be different. 
  2. Think of these changes as cycles. They turn, they change. We plant, things grow, we harvest. We don’t have to perfectly anticipate the turns, but we can’t forget they’re always coming. 
  3. Remember that in a bust, things are riskier in the short run because they could get worse, but safer in the long run because they will get better.

The busts are our friends. The best opportunities, in hindsight, will arise from these ashes. They’re just really hard to see in the fog of the moment. Look hard. We will get through this. Plant seeds.

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