Video Link: https://youtu.be/Hcqn5vkZomo
In this episode, Guy Spier talks about how does compounding human goodwill helped him in life?
In this episode, you’ll learn:
The powerful effect of compounding goodwill.
What actions Guy Spier took in compounding human goodwill and why he do it?
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GUY SPIER 00:00
So if there's three ideas that I would love for you to take away from this talk, I'll feel like I've achieved something. So you thought you're coming to hear a talk about investing.
You know, everybody understands compound interest and the key thing is – and you know, humans evolved to be hunter gatherers. That's how our brains are wired. A whole bunch of things we don't do very well, we don't evaluate probabilities very well. And we cannot conceive of compound interest. We cannot conceive of something sort of gradually increasing and then the linear slope of that keeps going up. We just think in terms of linear slopes. And I feel like once I understood that I saw that all the time.
So, you know, there's this idea that compound interest is the eighth miracle of – is the eighth wonder of the world. And it's quite extraordinary that if you just compound – and you can do the numbers, I show them to my investors every year – if you just compound at any rate for a long period of time, then the amounts get very, very large very, very quickly. But the point that I want to put to you is that you can compound goodwill over time.
And so, as part of my journey, I started in – so I ended up starting to invest and I fell in love with Warren Buffett and Charlie Munger. Anything Warren Buffett and Charlie Munger I'd consume it.
Charlie Munger gave a talk where he talks about the 24 standard causes of human misjudgements. Anybody who hasn't listen to that talk, believe me: it's better time spent listening to that talk than listening to me. It's really an amazing set of 24 things that once I heard it, I started seeing those patterns again and again.
So [INAUDIBLE] talks in the book – talks in his book, "The Psychology of Human Misjudgement," about the power of reciprocation. And he talks about these Hare Krishna people in airports, where they kind of handing out flowers. They're giving out free flowers and you say, "why are you giving me a free flower?" They say, "it's just a gift from us." 10 yards later, there's a place where you can make a donation and it's just incredibly effective.
So I started conducting my own version of that and I started just – and you know, it's partly born out of desperation, because, you know, the standard routes to career success were now closed to me.
I was handing out gifts to the doorman, the person I met in the street. I was writing thank you notes to people. And I just – I was determined, because he describes also in the book the salesman who was the most successful car salesman who sold – I don't know – how many cars in a year, but he will sent out thousands of notes that basically said, I like you.
And if you – so all of my friends are looking at that and they're saying, that's ridiculous. That's not a strategy for success in life. I mean, what is that going to get you? It wasn't going to get me anything short term, but I'm slightly crazy in that way and when something grabs me I just do it. Sometimes if it fascinates me I do it with a great intensity.
So I set myself the goal of, I think it was five notes, three notes a day, five days a week, and just kept sending out notes and sending out notes and sending out notes. And if I sum up the number of pieces of direct mail that I've sent out to the planet, it's more than 10,000, it's probably more than 20,000 or 30,000 over the last eight or nine years.
But I just think that so much of what is good has happened in my life, including meeting some key people, is the direct result of just compounding human goodwill. Simple as that.