The book I unashamedly recommend to anyone in the “self-help” category is Atomic Habits [1]. I don’t think I learned anything from that book that I hadn’t learned elsewhere. But the fact that things are synthesised cohesively in a book, leads to some activation in the brain that drives the point home more strongly.

This is why I think consuming long-form self-help content is beneficial for some folk, especially when it’s context-dependent and immediately applicable for the phase of life they’re going through. Even if the subject matter is obvious. But I digress.

In Atomic Habits, Clear writes about going to the gym when it’s hard. He notes that on a sunny day, everyone rocks up to the gym and everybody works out. But when it’s cold and rainy outside, the gym is virtually empty. As he puts it: “If you go to the gym even when it’s snowing, you have evidence that you are committed to fitness.”

The crux is that it’s easier to do hard things in easy times. But doing hard things when it’s hard often leads to outsized outcomes. You’re expending a lot of effort to do the hard thing anyway. For marginally more effort, you can play in a field where there’s the least amount of competition - in the hard times.

Does it matter?

Time is finite: Whether you do the easy thing or the hard thing, the time you have to do it is capped by your lifetime. Furthermore, it’s hard to do hard things when you’re older. People get set in their ways. There’s only a limited time window where the choice is available.

Easy thing is the default choice: It’s the path of least resistance. You don’t need to do the hard thing because it’s hard. Conserving energy when needed is a good thing. But there’s a difference between riding the slipstream and entirely giving up the race.

Doing hard things is by itself - hard: That’s why they’re called a “hard thing”. Not everyone does it. There’s a price that you must pay. Especially when there’s an easy option available.

You’re not the only one doing hard things: The world is big. If you’re doing a hard thing, probably there are other people wanting to do the same hard thing as you. Payoff might also be zero-sum. Two people may stretch themselves for a promotion, but there’s only one seat available. A thousand people will bet on the market, but the payoff is divided amongst them.

To consistently get the most optimal outcome, you should do hard things when they’re hard to do: If there are 25% rainy days in the calendar, a person who doesn’t go to the gym on rainy days will do 25% less volume than a person who chooses to weather the cold and the rain. Exposing yourself financially in a bull market is easy. Investing in a down market requires conviction.

Everyone looks like a genius in a bull market

To that last point - Warren Buffett famously has been criticized for not doing well in a bull market [2]. When arbitrageurs are making money in a bull market, they look like geniuses. But as history had shown it, Berkshire’s best years are during market downturns.

Here’s a quote from the 2014 Berkshire Hathaway Annual Shareholders Meeting [3].

BRK will underperform in very strong up years. We’ll probably, more or less, match in moderate up years. We’ll do better than average in even years or down years.

You can almost say that down markets are what seperates the arbitrageurs from the missionaries.

Clearing Out the Brush

Perhaps this quote from Marc Andreessen sums it up perfectly, as he appeared on John Collison’s podcast [4]:

The danger is, in a lot of ways, it becomes established. And when it becomes established, it starts to attract establishment people… And in that sense, the downturns, as much of a pain in the butt as they are, are probably helpful… You go back to banking, you go back to consulting… Yes. And the only people who are left, and by the way, this was Silicon Valley when I arrived in ‘93, this had happened. And then this was Silicon Valley in 2004 as we discussed, which is you flush all the status seekers, you flush all the tourists… It’s like fuel management for fire… Correct. Exactly. A hundred percent. You clear out the brush.

[1] Atomic Habits , James Clear (2018).

[2] What’s Wrong Warren? , Brian Langis (2018).

[3] Berkshire Hathaway Annual Meeting Extensive Notes , ValueWalk (2014).

[4] Cheeky Pint: Marc Andreessen & Charlie Songhurst , John Collison’s podcast where Stripe’s co-founder interviews other like-minded people over a pint.