Book Summaries

Charles T. Munger: Poor Charlie’s Almanack Part 2 Book Summary

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Synthesis of Ideas

When you have a latticework of mental models, you can see how they interact in interesting ways. Here’s one Poor Charlie’s Almanack summary of two competing economic principles.

  • “Number one is Ricardo’s principle of comparative advantage in trade, and the other is Adam Smith’s pin factory. And both of these, of course, work to vastly increase economic output per person, and they’re similar in that each somehow directs functions into the hands of people who are very’ good at doing the functions. Yet, they’re radically different examples in that one of them is the ultimate example of central planning—the pin factory—where the whole system was planned by somebody, while the other example, Ricardo’s, happens automatically as a natural consequence of trade.”
  • “And, of course, once you get into the joys of synthesis, you immediately think, “Do these things interact?” Of course they interact. Beautifully. And that’s one of the causes of the power of a modern economic system. I saw an example of that kind of interaction years ago. Berkshire had this former savings and loan company, and it had made this loan on a hotel right opposite the Hollywood Park Racetrack. In due time, the neighbourhood changed, and it was full of gangs, pimps, and dope dealers. They tore copper pipe out of the wall for dope fixes, and there were people hanging around the hotel with guns, and nobody would come. We foreclosed on it two or three times, and the loan value went down to nothing. We seemed to have an insolvable economic problem—a microeconomic problem.”
  • “Now, we could have gone to McKinsey, or maybe a bunch of professors from Harvard, and we would have gotten a report about ten inches thick about the ways we could approach this failing hotel in this terrible neighbourhood. But instead, we put a sign on the property that said: “For sale or rent.” And in came, in response to that sign, a man who said, “I’ll spend $200,000 fixing up your hotel and buy it at a high price on credit, if you can get zoning so I can turn the parking lot into a putting green.” “You’ve got to have a parking lot in a hotel,” we said. “What do you have in mind?” He said, “No, my business is flying seniors in from Florida, putting them near the airport, and then letting them go out to Disneyland and various places by bus and coming back. And I don’t care how bad the neighbourhood is going to be because my people are self-contained behind walls. All they have to do is get on the bus in the morning and come home in the evening, and they don’t need a parking lot; they need a putting green.” So we made the deal with the guy. The whole thing worked beautifully, and the loan got paid off, and it all worked out.”
  • “Obviously, that’s an interaction of Ricardo and the pin factory examples. The odd system that this guy had designed to amuse seniors was pure pin factory, and finding the guy with this system was pure Ricardo. So these things are interacting.”


On Investing and Business

In Poor Charlie’s Almanack, Munger doesn’t talk directly about Berkshire Hathaway’s decisions much, but he does share the general investment philosophies and practices that have made them successful over decades.


Berkshire Hathaway

  • “We’re like the hedgehog that only knows one big thing: If you can generate float [cash from insurance premiums that Berkshire can invest before claims must be paid] at three percent and invest it in businesses that generate thirteen percent, that’s a pretty good business.”
  • “The future will be harder for Berkshire Hathaway for two reasons: 1) We’re so big. It limits our investment options to more competitive areas. 2) The current climate offers prospects in common stocks over the next fifteen to twenty years that are way less than we’ve experienced over the past fifteen to twenty years.”
  • “It’s a finite and very competitive world. All large aggregations of capital eventually find it hell on earth to grow and thus find a lower rate of return.”
  • “Two-thirds of acquisitions don’t work. Ours work because we don’t try to do acquisitions— we wait for no-brainers.”
  • “Lumpy results and being willing to write less insurance business if market conditions are unfavorable…that is one of our advantages as an insurer— we don’t give a damn about lumpy results. Everyone else is trying to please Wall Street. This is not a small advantage.”
  • “There are two types of mistakes: 1) doing nothing, what Warren calls “sucking my thumb” and 2) buying with an eyedropper things we should be buying a lot of.”
  • “The most extreme mistakes in Berkshire’s history have been mistakes of omission. We saw it, but didn’t act on it. They’re huge mistakes— we’ve lost billions.”
  • “Intel and its ilk create a coherent culture where teams solve difficult problems on the cutting edge of science. That’s radically different from Berkshire Hathaway. Berkshire is a holding company. We’ve decentralized all the power except for natural headquarters-type capital allocation…It’s not at all clear to me that Warren or I would be that good at doing what Andy Grove does.


Investment Practices

Here’s a Poor Charlie’s Almanack summary of the major concepts to know about investing in companies.

  • Remember: “Only twenty percent of the people can be in the top fifth“
  • “However, the market was not perfectly efficient. With enough shrewdness and fanaticism, some people will get better results than others.” “It is given to human beings who work hard at it— who look and sift the world for a mispriced bet— that they can occasionally find one.”
  • Bet seldom, but bet hard when you have a deal
    • “The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t. It’s just that simple.”
    • “How many insights do you need? Well, I’d argue that you don’t need many in a lifetime. If you look at Berkshire Hathaway and all of its accumulated billions, the top ten insights account for most of it.”
    • “It makes sense to load up on the very few good insights you have instead of pretending to know everything about every thing at all times. How many of you have fifty-six brilliant insights in which you have equal confidence? Raise your hands, please. How many of you have two or three insights that you have some confidence in?”
    • When Warren lectures at business schools, he says, “I could improve your ultimate financial welfare by giving you a ticket with only twenty slots in it so that you had twenty punches— representing all the investments that you got to make in a lifetime. And once you’d punched through the card, you couldn’t make any more investments at all.” He says, “Under those rules, you’d really think carefully about what you did, and you’d be forced to load up on what you’d really thought about. So you’d do so much better.”
    • “There are huge advantages for an individual to get into a position where you make a few great investments and just sit on your ass: You’re paying less to brokers. You’re listening to less nonsense. And if it works, the governmental tax system gives you an extra one, two, or three percentage points per annum compounded.”
    • “We just look for no-brainer decisions. As Buffett and I say over and over again, we don’t leap seven-foot fences. Instead, we look for one-foot fences with big rewards on the other side. So we’ve succeeded by making the world easy for ourselves, not by solving hard problems.”
  • Pari Mutuel
    • Markets are like betting odds. The best horse is obvious, but it is not obviously a better deal.“Any damn fool can see that a horse carrying a light weight with a wonderful win rate and a good post position, etc., etc., is way more likely to win than a horse with a terrible record and extra weight and so on and so on. But if you look at the damn odds, the bad horse pays 100 to 1, whereas the good horse pays 3 to 2. Then, it’s not clear which is statistically the best bet using the mathematics of Fermat and Pascal.”
  • “Over many decades, our usual practice is that if [the stock of] something we like goes down, we buy more and more. Sometimes something happens, you realize you’re wrong, and you get out. But if you develop correct confidence in your judgment, buy more and take advantage of stock prices.”
  • “So you can get very remarkable investment results if you think more like a winning pari-mutuel player. Just think of it as a heavy odds against game full of bullshit and craziness with an occasional mispriced something or other. And you’re probably not going to be smart enough to find thousands in a lifetime. And when you get a few, you really load up. It’s just that simple.”
  • Market
    • Instead of thinking the market was efficient, Graham treated it as a manic-depressive who comes by every day. And some days “Mr. Market” says, “I’ll sell you some of my interest for way less than you think it’s worth.” And other days, he comes by and says, “I’ll buy your interest at a price that’s way higher than you think it’s worth.” And you get the option of deciding whether you want to buy more, sell part of what you already have, or do nothing at all. To Graham, it was a blessing to be in business with a manic-depressive who gave you this series of options all the time.”
  • Deviating from Graham
    • “Graham didn’t want to ever talk to management. And his reason was that, like the best sort of professor aiming his teaching at a mass audience, he was trying to invent a system that anybody could use. He also had a concept that management would often couch the information very shrewdly to mislead.”
    • “We realized that some company that was selling at two or three times book value could still be a hell of a bargain because of momentums implicit in its position, sometimes combined with an unusual managerial skill plainly present in some individual or other, or some system or other.”
    • “If a business earns eighteen percent on capital over twenty or thirty years, even if you pay an expensive looking price, you’ll end up with one hell of a result.”
  • How to find deals
    • “How do you get into these great companies? One method is what I’d call the method of finding them small— get ’em when they’re little. For example, buy WalMart when Sam Walton first goes public and so forth.”
    • “Ideally— and we’ve done a lot of this— you get into a great business which also has a great manager because management matters. For example, it’s made a hell of a difference to General Electric that Jack Welch came in instead of the guy who took over Westinghouse— one hell of a difference.”
    • “However, averaged out, betting on the quality of a business is better than betting on the quality of management.”
    • “There are actually businesses that you will find a few times in a lifetime where any manager could raise the return enormously just by raising prices— and yet they haven’t done it. So they have huge untapped pricing power that they’re not using. That is the ultimate no-brainer. That existed in Disney. It’s such a unique experience to take your grandchild to Disneyland. You’re not doing it that often. And there are lots of people in the country. And Disney found that it could raise those prices a lot, and the attendance stayed right up…Once you figure that out, it’s like finding money in the street— if you have the courage of your convictions.”
    • How do you and Warren evaluate an acquisition candidate? “We’re light on financial yardsticks; we apply lots of subjective criteria: Can we trust management? Can it harm our reputation? What can go wrong? Do we understand the business? Docs it require capital infusions to keep it going? What is the expected cash flow? We don’t expect linear growth; cyclicality is fine with us as long as the price is appropriate.”
    • “It doesn’t help us merely for favorable odds to exist. They have to be in a place where we can recognize them. So it takes a mispriced opportunity that we’re smart enough to recognize. And that combination doesn’t occur often.”
  • Cancer surgery model
    • “They look at this mess. And they figure out if there’s anything sound left that can live on its own if they cut away everything else. And if they find anything sound, they just cut away everything else. Of course, if that doesn’t work, they liquidate the business. But it frequently does work.”



Valuing Companies

  • “A great business at a fair price is superior to a fair business at a great price.”
  • “We’re partial to putting out large amounts of money where we won’t have to make another decision. If you buy something because it’s undervalued’, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But, if you can buy a few great companies, then you can sit on your ass. That’s a good thing. “
  • There are two kinds of businesses: The first earns twelve percent, and you can take the profits out at the end of the year. The second earns twelve percent, but all the excess cash must be reinvested— there’s never any cash. It reminds me of the guy who sells construction equipment— he looks at his used machines, taken in as customers bought new ones, and says, “There’s all of my profit, rusting in my yard.” We hate that kind of business.”
  • “As one factor, Graham had this concept of value to a private owner— what the whole enterprise would sell for if it were available. If you could take the stock price and multiply it by the number of shares and get something that was one-third or less of sellout value, you’ve got a lot of edge going for you.”


What Makes Companies Successful?

  • “Extreme success is likely to be caused by some combination of the following factors:
  • A) Extreme maximization or minimization of one or two variables. Example, Costco or our furniture and appliance store.
  • B) Adding success factors so that a bigger combination drives success, often in nonlinear fashion, as one is reminded by the concept of breakpoint and the concept of critical mass in physics. Often results are not linear. You get a little bit more mass, and you get a lollapalooza result.
  • C) An extreme of good performance over many factors. Example, Toyota or Les Schwab.
  • D) Catching and riding some sort of big wave. Example, Oracle.”



  • “The effect of taxes. If you’re going to buy something that compounds for thirty years at fifteen percent per annum and you pay one thirty-five percent tax at the very end, the way that works out is that after taxes, you keep 13.3 percent per annum”
  • “In contrast, if you bought the same investment but had to pay taxes every year of thirty-five percent out of the fifteen percent that you earned, then your return would be fifteen percent minus thirty-five percent of fifteen percent— or only 9.73 percent per year compounded. So the difference there is over 3.5 percent.”
  • “You don’t have to be brilliant, only a little bit wiser than the other guys, on average, for a long, long time.”
  • Limits thereof
    • “We have said that common stocks generally have generated returns of ten to eleven percent after inflation for many years and that those returns can’t continue for a very long period. And they can’t. It’s simply impossible. The wealth of the world will compound at no such rate.”


Moats and Competitive Advantage

  • So we think in terms of that moat and the ability to keep its width and its impossibility of being crossed as the primary criterion of a great business. And we tell our managers we want the moat widened every year.That doesn’t necessarily mean the profit will be more this year than it was last year because it won’t be sometimes. However, if the moat is widened every year, the business will do very well. When we see a moat that’s tenuous in any way— it’s just too risky’. We don’t know how to evaluate that. And, therefore, we leave it alone.” – Warren Buffett
  • “I have a clipping from the 1911 Buffalo Evening News that lists the fifty most important stocks then actively traded on the New York Stock Exchange. Today only one, General Electric, remains in business as a large, independent company.That’s how powerful the forces of competitive destruction are. Over the very long term, history shows that the chances of any business surviving in a manner agreeable to a company’s owners are slim at best. It gets extra tough when a fanatical small competitor— like a Rose Blumkin. or a Les Schwab, or a Sam Walton — sets their sights on your particular marketplace. How do you compete against a true fanatic? You can only try to build the best possible moat and continuously attempt to widen it.”



  • “Over the years, we’ve tried to figure out why the competition in some markets gets sort of rational from the investor’s point of view so that the shareholders do well, while in other markets there’s destructive competition that destroys shareholder wealth. If it’s a pure commodity like airline seats, you can understand why no one makes any money. Competition was so intense that, once it was unleashed by deregulation, it ravaged shareholder wealth in the airline business. Yet, in other fields —like cereals, for example—almost all the big boys make out. why are cereals so profitable—despite the fact that it looks to me like they’re competing like crazy with promotions, coupons, and everything else? I don’t fully understand it.Obviously, there’s a brand identity factor in cereals that doesn’t exist in airlines. That must be the main factor that accounts for it.”
  • And maybe the cereal makers, by and large, have learned to be less crazy about fighting for market share—because if you get even one person who’s hell-bent on gaining market share…. for example, if I were Kellogg and I decided that I had to have sixty percent of the market, I think I could take most of the profit out of cereals. I’d ruin Kellogg in the process. But I think I could do it.”
  • “if you look around at bottler markets, you’ll find many markets where bottlers of Pepsi and Coke both make a lot of money and many others where they destroy most of the profitability of the two franchises. That must get down to the peculiarities of individual adjustment to market capitalism. I think you’d have to know the people involved to fully understand what was happening.”
  • The Effect of Technology
    • [In a competitive market, new technology that is accessible to everyone passes the value down only to the consumer. Everyone adopts the technology and there is no edge. If it’s a lousy business, add new technology and it’s still a lousy business.]
    • “Discriminate between when technology is going to help you and when it’s going to kill you.”
    • “The huge productivity increases that would come from a better machine introduced into the production of a commodity product would all go to the benefit of the buyers of the textiles. Nothing was going to stick to our ribs as owners.”
    • “Conversely, if you own the only newspaper in Oshkosh and they were to invent more efficient ways of composing the whole newspaper, then when you got rid of the old technology and got new, fancy computers and so forth, all of the savings would come right through to the bottom line”
    • “When technology moves as fast as it does in a civilization like ours, you get a phenomenon that I call competitive destruction. You know, you have the finest buggy whip factory, and, all of a sudden, in comes this little horseless carriage. And before too many years go by, your buggy whip business is dead. You either get into a different business or you’re dead— you’re destroyed. It happens again and again and again”
    • “And when these new businesses come in, there are huge advantages for the early birds. And when you’re an early bird, there’s a model that I call “surfing”— when a surfer gets up and catches the wave and just stays there, he can go a long, long time. But if he gets off the wave, he becomes mired in shallows.”
    • [Hence why Berkshire tends not to invest in technology.]
  • [On Harvard needing to change its investment methods to be unconventional again, now that its success is now conventional wisdom] “It is quite counter-intuitive to decrease that part of one’s activity that has recently worked best. But this is often a good idea. And so also with reducing one’s perception of one’s needs, instead of increasing risks in an attempt to satisfy perceived needs.”
  • “Reinsurance is not as much of a commodity business as it might appear. There’s such a huge time lag between when the policy is written and when it is paid that the customer has to evaluate the insurer’s future willingness and ability to pay.”


Top of Form

Bottom of Form


Common Investment Myths

  • “The reason we avoid the word “synergy” is because people generally claim more synergistic benefits than will come. Yes, it exists, but there are so many false promises. Berkshire is full of synergies— we don’t avoid synergies, just claims of synergies.”
  • “Beta and modern portfolio theory and the like— none of it makes any sense to me. We’re trying to buy businesses with sustainable competitive advantages at a low, or even a fair, price. How can professors spread this [nonsense that a stock’s volatility is a measure of risk]?”
  • “People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There’s always been a market for people who pretend to know the future. Listening to today’s forecasters is just as crazy as when the king hired the guy to look at the sheep guts.
  • “The Greek orator was clearly right about an excess of optimism being the normal human condition, even when pain or the threat of pain is absent. Witness happy people buying lottery tickets or believing that credit-furnishing, delivery-making grocery stores were going to displace a great many superefficient cash-and-carry supermarkets.”


Designing Good Systems with Incentives

  • “I have a friend who made an industrial product at a plant in Texas not far from the border. He was in a low-margin, tough business. He got massive fraud in the workers’ compensation system—to the point that his premiums reached double-digit percentages of payroll. And it was not that dangerous to produce his product. It’s not like he was a demolition contractor or something. So he pleaded with the union, “You’ve got to stop this. There’s not enough money in making this product to cover all of this fraud.” But, by then, everyone’s used to it. “It’s extra income. It’s extra money. Everybody does it. It can’t be that wrong. Eminent lawyers, eminent doctors, eminent chiropractors—if there are any such things—are cheating.” So my friend closed his plant and moved the work to Utah among a community of believing Mormons. Well, the Mormons aren’t into workers’ compensation fraud —at least they aren’t in my friend’s plant. And guess what his workers’ compensation expense is today? It’s two percent of payroll —down from double digits. This sort of tragedy is caused by letting the slop run. You must stop slop early. It’s very hard to stop slop and moral failure if you let it run for a while.
  • “If I were running the civilization, compensation for stress in workers’ comp would be zero—not because there’s no work-caused stress, but because I think the net social damage of allowing stress to be compensated at all is worse than what would happen if a few people that had real work-caused stress injuries went uncompensated I like the Navy system. If you’re a captain in the Navy and you’ve been up for twenty-four hours straight and have to go to sleep and you turn the ship over to a competent first mate in tough conditions and he takes the ship aground—clearly through no fault of yours—they don’t court-martial you, but your naval career is over. It doesn’t matter why your ship goes aground, your career is over. Nobody’s interested in your fault. It’s just a rule that we happen to have—for the good of all, all effects considered.”
  • “The craving for perfect fairness causes a lot of terrible problems in system function.”



  • [Carnation was trying to buy the trademark of Carnation Fish.] “In the end, Carnation came to him sheepfacedly and said, “We’d like to put our quality control inspectors into your fish plants to make sure that your fish are perfect; and we’ll pay all the costs”—which he quickly and smirkily allowed. So he got free quality control in his fish plants- courtesy of the Carnation Company. This history shows the enormous incentive you create if you give a guy a trade¬ mark [he can protect]. And this incentive is very useful to the wider civilization. As you see, Carnation got so that it was protecting products that it didn’t even own.”


Passive Investing

Charlie Munger is strongly against active investment managers who take percentage of fees. One speech in Poor Charlie’s Almanack is directed at large charitable foundations and excoriating their reliance on greedy managers.

  • “Even when nothing but unleveraged stock picking is involved, the total cost of all the investment management, plus the frictional costs of fairly often getting in and out of many large investment positions, can easily reach three percent of foundation net worth per annum if foundations, urged on by consultants, add new activity, year after year.”
  • “And it is also inescapable that exactly half of the investors will get a result below the median result after the croupiers’ take, which median result may well be somewhere between unexciting and lousy.”
  • “But, you may think, my foundation, at least, will be above average. It is well endowed, hires the best, and considers all investment issues at length and with objective professionalism. And to this I respond that an excess of what seems like professionalism will often hurt you horribly—precisely because the careful procedures themselves often lead to overconfidence in their outcome.”
  • “febezzlement” —the functional equivalent of embezzlement—to explain how wealth is stripped away by layers of unnecessary investment managers and consultants
  • “The study concluded that the typical mutual fund investor gained at 7.25 percent per year in a fifteen-year period when the average stock fund gained at 12.8 percent per year (presumably after expenses).”
  • “Assume that 2006 stock prices rise by 200% while corporate earnings do not rise, at which point all the sensibly distributable earnings of all U.S. corporations combined amount to less than the total of all stockholder investment costs, because such costs rise proportionally with stock prices. Now, so long as this situation continues, no money at all, net of investment costs, is going out of all corporations to all corporate owners combined. Instead, frictional cost imposers get more than all sensibly distributable corporate earnings.”



  • [in 2003] “I confidently predict that there are big troubles to come. The system is almost insanely irresponsible. And what people think are fixes aren’t really fixes. It’s so complicated I can’t do it justice here—but you can’t believe the trillions of dollars involved. You can’t believe the complexity. You can’t believe how difficult it is to do the accounting. You can’t believe how big the incentives are to have wishful thinking about values and wishful thinking about ability to clear.”
  • “Running off a derivative book is agony and takes time. And you saw what happened when they tried to run off the derivative books at Enron. Its certified net worth vanished. In the derivative books of America, there are a lot of reported profits that were never earned and assets that never existed.”


Wealth Effect and Booms/Busts

This Poor Charlie’s Almanack summary section describes how stock market booms and busts tend to happen, and how investment managers actively contribute to them by exaggerating the gains that are created.

  • “First, spending proclivity is influenced in an upward direction when stock prices go up and in a downward direction when stock prices go down…complication that increased spending tends to drive up stock prices while stock prices are concurrently driving up spending. Also, of course, rising stock prices increase corporate earnings even when spending is static, for instance, by reducing pension cost accruals after which stock prices tend to rise more.”
  • “The Japanese economy, year after year, stays stalled, as Japanese proclivity to spend stubbornly resists all the tricks of the economists.”
  • “A median conclusion of the economics professionals, based mostly on data collected by the Federal Reserve System, would probably be that the “wealth effect” on spending from stock prices is not all that big. After all, even now, real household net worth, excluding pensions, is probably up by less than one hundred percent over the last ten years and remains a pretty modest figure per household, while market value of common stock is probably not yet one-third of aggregate household net worth, excluding pensions.”
  • “For one thing, I have been told, probably correctly, that Federal Reserve data collection, due to practical obstacles, doesn’t properly take into account pension effects, including effects from 401 (k) and similar plans.”
  • “For another thing, the traditional thinking of economists often does not take into account implications from the idea of “bezzle.” After all, the embezzler spends more because he has more income, and his employer spends as before because he doesn’t know any of his assets are gone.”
  • “As Keynes showed, in a native economy relying on earned income, when the seamstress sells a coat to the shoemaker for twenty dollars, the shoemaker has twenty dollars less to spend, and the seamstress has twenty dollars more to spend. There is no lollapalooza effect on aggregate spending. But when the government prints another twenty dollar bill and uses it to buy a pair of shoes, the shoemaker has another twenty dollars, and no one feels poorer. And when the shoemaker next buys a coat, the process goes on and on, not to an infinite increase, but with what is now called the Keynesian multiplier effect, a sort of lollapalooza effect on spending.”
  • “You people, I think, have created a lot of “febezzle” through your foolish investment management practices in dealing with your large holdings of common stock.”
  • “If a foundation, or other investor, wastes three percent of assets per year in unnecessary, nonproductive investment costs in managing a strongly rising stock portfolio, it still feels richer, despite the waste, while the people getting the wasted three percent, “febezzlers” though they are, think they are virtuously earning income.”
  • “Now, toss in with “febezzlement” in investment management about $750 billion in floating, ever-growing, ever-renewing wealth from employee stock options and you get lot more common-stock-related “wealth effect” driving consumption, with some of the “wealth effect” from employee stock options being, in substance, “febezzle” effect, facilitated by the corrupt accounting practice now required by standard practice”
  • “Next, consider that each one-hundred-point advance in the S&P adds about $1 trillion in stock market value, and throw in some sort of Keynesian-tvpe multiplier effect related to all “febezzlement.” The related macroeconomic “wealth effects,” I believe, become much larger than is conventionally supposed.”
  • “It is an unfortunate fact that great and foolish excess can come into prices of common stocks in the aggregate. They are valued partly like bonds, based on roughly rational projections of use value in producing future cash. But they are also valued partly like Rembrandt paintings, purchased mostly because their prices have gone up, so far.”
  • “Suppose all pension funds purchased ancient art, and only ancient art, with all their assets. Wouldn’t we eventually have a terrible mess on our hands, with great and undesirable macroeconomic consequences?”
  • “My foregoing acceptance of the possibility that stock value in aggregate can become irrationally high is contrary to the hard-form “efficient market” theory that many of you once learned as gospel from your mistaken professors of yore. Your mistaken professors were too much influenced by “rational man” models of human behavior from economics and too little by “foolish man” models from psychology and real-world experience. “Crowd folly,” the tendency of humans, under some circumstances, to resemble lemmings, explains much foolish thinking of brilliant men and much foolish behavior – like investment management practices of many foundations represented here today. It is sad that today each institutional investor apparently fears most of all that its investment practices will be different from practices of the rest of the crowd.”
  • “When stock market advances and declines are regarded as long-lasting, there is more downside force on optional consumption per dollar of stock market decline than there is upside force per dollar of stock market rise.”
  • [I don’t quite follow this. Febezzlement would happen if the investor thought she had more gains than she really did (if the money were stolen for example). But because the fees are clear, the absolute returns should be clear to the investor.]


Building a Trillion Dollar Company

In Poor Charlie’s Almanack, Munger poses an interesting challenge – how to grow a trillion dollar company from scratch. He uses this as an example of explaining success from first principles, which can lead to better management and decision making.

  • It is 1884 and you are given 2 million dollars. How do you grow it to be a 2 trillion dollar company? Your company name must be Coca-Cola, and you must create a non-alcoholic beverage business. Here is Charlie’s strategy.
  • No brainer decisions:
    • Trademark Coca-Cola, since you’ll never make enough selling generic beverages.
    • This beverage must succeed worldwide to get the scale needed.
  • Use math to size the problem:
    • By 2034, there will be 8 billion consumers. Each consumer must drink 64oz of water per day. If you capture half the market, and each person drinks 16oz of Coca-Cola a day, we can sell 2.92 trillion eight-ounce servings in 2034.
    • Then, if you net 4 cents per serving, you’ll earn $117 billion.
  • Major Factors Over Time
    • Dollar will depreciate.
    • Purchasing power will rise, probably by at least 40x over 150 years.
    • Consumers’ desire to improve their drinking experience will rise.
    • Technology reduces cost of creating product.
    • Working backwards, purchasing power change implies that in 1884, we need just 0.1 cent per serving of earnings.
  • Lollapalooza Required
    • To create a beverage market overtaking 1/4thof all beverage consumption, and take half the market, you must have a lollapalooza as a combination of multiple factors. Here are the factors that play:
    • Conditioned reflexes: Coca-Cola brand triggers purchase response
      • Operant conditioning: Maximize rewards of ingestion, and minimize reflexes that are extinguished by competitors.
        • Food value in calories
        • Flavor, texture, aroma acting as stimuli to consumption under evolutionary neural programming
        • Stimulus, by sugar or caffeine
        • Cooling effect when man is too hot, or warming effect when man is too cool. Cooling is better, as there aren’t as many options to cool someone as there are to heat. Also, when you are hot, you must consume more liquid.
        • To ward off competitors: you must have instantaneous availability. A competing product, if it’s never tried, can’t create a conflicting habit.
      • Classical conditioning: Associate positive things with Coca-Cola
        • Advertising associates happiness, sex, etc. with the drink
        • Color look like wine instead of sugared color
        • Carbonate water to seem like champagne
      • Social Proof
        • The more universal consumption is, the more acceptable it is, and the better the effects of consumption
      • Volume-creates-power
        • Mass advertising
        • Distribution
      • Logistics and Distribution
        • Syrup to fountains and restaurants
        • Complete carbonated-water product in containers
          • Need many bottling plants around the world
        • Pricing
          • Must set first-sale price. Any independent bottler should be a subcontractor, not a vendee of syrup
          • No perpetual franchises with pricing set forever
        • Invert, always invert. What don’t we want?
          • Avoid the stop-consumption feelings of aftertaste so people drink liters of our product
          • Never lose even half of our trademark
          • Don’t cause envy, by deserving our success. Be fanatic about product quality, presentation, reasonableness of prices
          • At scale, avoid making huge and sudden changes in flavor. This would eradicate the Pavlovian conditioning, trigger deprival super-reaction, allow competitors to swoop in and replicate the flavor.
        • The point to this exercise is that most people, even having observed Coca-Cola for most of their lives, cannot explain the success of Coca-Cola. Furthermore, recent executives could not understand the fundamentals well enough to predict the failure of “New Coke.”
          • Similarly: “General Motors recently made just such a mistake, and it was a lollapalooza. Using fancy consumer surveys, its excess of professionalism, it concluded not to put a fourth door in a truck designed to serve also as the equivalent of a comfortable five-passenger car. Its competitors, more basic, had actually seen five people enter and exit cars. Moreover, they had noticed that people were used to four doors in a comfortable five-passenger car and that biological creatures ordinarily prefer effort minimization in routine activities and don’t like removals of long-enjoved benefits. There are only two words that come instantly to mind in reviewing General Motors’ horrible decision, which has blown many hundreds of millions of dollars. And one of those words is “oops.””
        • A follow-on point is that in times of duress and need to change, don’t suddenly forget the fundamentals of the situation. Your new strategy may contravene what got you to your position.


Stock Options Expensing

  • Munger and Buffett both believe issuing stock options must be accounted for as part of expenses. Avoiding this inflates company earnings (which is why executives like doing it).
  • Munger gives the parable of Quant Tech, a stable engineering firm whose founder dies. The new management starts a financial scheme to not report options as part of expenses. They start giving options instead of compensation, which reduces their expenses and increases earnings dramatically.
  • Because of Quant Tech’s cash balances from its earlier days, its finances don’t look too suspicious. But it starts practicing active subterfuge, for instance disguising its very low income taxes by prompting foreign government clients to increase company fees while increasing foreign taxes paid.
  • Because of boosted earnings and regular earnings growth, the stock prices were naturally inflated, and the holders of stock benefited from the share price. However, eventually suspicion mounts when the earnings don’t quite make sense, the real results are reported, confidence plummets, stock plummets.
  • My more general takeaways from the parable are that 1) there is such a thing as true fundamental value, and good companies report this; 2) short-term greedy schemes to profit need continuous lies to perpetuate the scheme, which leads eventually to their unraveling.



Charlie’s Investment Checklist


All investment evaluations should begin by measuring risk, especially reputational.

  • Incorporate an appropriate margin of safety
  • Avoid dealing with people of questionable character
  • Insist upon proper compensation for risk assumed
  • Always beware of inflation and interest rate exposures
  • Avoid big mistakes; shun permanent capital loss

Only in fairy tales are emperors told they’re naked.

  • Objectivity and rationality require independence of thought
  • Remember that just because other people agree or disagree with you doesn’t make you right or wrong – the only thing that matters is the correctness of your analysis and judgment
  • Mimicking the herd invites regression to the mean (merely average performance)

The only way to win is to work, work, work, and hope to have a few insights.

  • Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day
  • More important than the will to win is the will to prepare
  • Develop fluency in mental models from the major academic disciplines
  • If you want to get smart, the question you have to keep asking is “why, why, why?”

Acknowledging what you don’t know is the dawning of wisdom.

  • Stay within a well-defined circle of competence
  • Identify and reconcile disconfirming evidence
  • Resist the craving for false precision, false certainties, etc.
  • Above all, never fool yourself, and remember that you are the easiest person to fool

Use effective checklists to minimize errors and omissions.

  • Determine value apart from price; progress apart from activity; wealth apart from size
  • It is better to remember the obvious than to grasp the esoteric
  • Be a business analyst, not a market, macroeconomic, or security analyst
  • Consider totality of risk and effect; look always at potential second order and higher level impacts
  • Think forwards and backwards – Invert, always invert

Proper allocation of capital is an investor’s No. 1 job.

  • Remember that highest and best use is always measured by the next best use (opportunity cost)
  • Good ideas are rare – when the odds are greatly in your favor, bet (allocate) heavily
  • Don’t “fall in love” with an investment – be situation-dependent and opportunity-driven

Resist the natural human bias to act.

  • “Compound interest is the eighth wonder of the world” (Einstein); never interrupt it unnecessarily
  • Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake
  • Be alert for the arrival of luck
  • Enjoy the process along with the proceeds, because the process is where you live

When proper circumstances present themselves, act with decisiveness and conviction.

  • Be fearful when others are greedy, and greedy when others are fearful
  • Opportunity doesn’t come often, so seize it when it comes
  • Opportunity meeting the prepared mind; that’s the game

Live with change and accept unremovable complexity.

  • Recognize and adapt to the true nature of the world around you; don’t expect it to adapt to you
  • Continually challenge and willingly amend your “best-loved ideas”
  • Recognize reality even when you don’t like it – especially when you don’t like it

Keep it simple and remember what you set out to do.

  • Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat
  • Guard against the effects of hubris and boredom
  • Don’t overlook the obvious by drowning in minutiae
  • Be careful to exclude unneeded information or slop: “A small leak can sink a great ship”
  • Face your big troubles; don’t sweep them under the rug


Shout out to for doing this written summary

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Nassim Taleb: Fooled by Randomness Book Summary

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Fooled by Randomness by Nassim Nicholas Taleb



The Book in Three Sentences

Randomness, chance, and luck influence our lives and our work more than we realize. Because of hindsight bias and survivorship bias, in particular, we tend to forget the many who fail, remember the few who succeed, and then create reasons and patterns for their success even though it was largely random. Mild success can be explainable by skills and hard work, but wild success is usually attributable to variance and luck.

  • According to Taleb, the book’s most popular chapter was Chapter 11, the one in which he compressed all the literature on the topic of miscalculating probability.
  • Important point: “it’s more random than we think, not it is all random.” Chance favors preparedness, but it is not caused by preparedness (same for hard work, skills, etc.)
  • “This business of journalism is just about entertainment, particularly when it comes to radio and television.”
  • As much as we want to “keep it simple, stupid” … It is precisely the simplification of issues that are actually very complex, which can be dangerous.
  • “Things that happen with little help from luck are more resistant to randomness.”
  • “Mild success can be explainable by skills and labor. Wild success is attributable to variance.”
  • One common theory for why people pursue leadership is because of “social emotions” which cause others to be influenced by a person due to small, almost imperceptible physical signals like charisma, gestures, and gait.
  • This has also been shown via evolutionary psychology: when you perform well in life, you get all “puffed up” in the way you carry yourself, the bounce in your step, etc. From an evolution standpoint this is great because it becomes easier to spot the most successful / desirable mate.
  • The concept of alternative histories is particularly interesting. If you were to relive a set of events 1000 times, what would the range of outcomes be? If there is very little variance in your alternative histories (i.e. You chose to become a dentist and you will probably make more or less the same amount of money and live a similar lifestyle all 1000 times), then you are in a relatively non- random situation. Meanwhile, if there is a very wide range of normal results when considering 1,000 variations (entrepreneurs, traders, etc.), then it is a very random situation.
  • The quality of a choice cannot be judged just by the result. (I first learned this in baseball. Just because a pitch you call or play you call doesn’t work out doesn’t make it a poor choice. It could have been the right call, but bad luck. Or vice versa.)
  • “Certainty is something that is likely to take place across the highest number of different alternative histories. Uncertainty concerns events that should take place in the lowest number of them.”
  • You should think carefully about getting more insurance / shielding yourself from events that — although unlikely — could be catastrophic. You essentially want to insulate yourself from terrible random accidents.
  • We have a tendency to see risks against specific things as more likely than general risks (dying in a terrorist attack while traveling vs. dying on your next trip, even though the second includes the first). We seem to overvalue the things that trigger an emotional response and undervalue the things that aren’t as emotional.
  • We are so mentally wired to overvalue the sensational stories that you can “realize informational gains by dispensing with the news.”
  • Fascinating famous Swiss study of the amnesia patient who couldn’t remember doctor’s name but did remember him pricking her hand with a pin.
  • “Every man believes that he is quite different.”
  • It’s better to value old, distilled thoughts than “new thinking” because for an idea to last so long it must be good. That is, old ideas have had to stand the test of time. New ideas have not. Some new ideas will end up lasting, but most will not.
  • The ratio of undistilled information to distilled is rising. Let’s call information that has never had to prove its truth more than once or twice, undistilled. And information that has been filtered through many years, counter arguments, and situations is distilled. You want more distilled information (concepts that stand the test of time and rigorous analysis) and less undistilled information (the news, reactionary opinions, and “cutting edge” research).
  • There is nothing wrong with losing. The problem is losing more than you plan to lose. You need clear rules that limit your downside. (“If any investment loses one million dollars then our firm sells immediately.”)
  • Much of what is randomness is timing. The best strategy for a given time period is often not the best strategy overall. In any given cycle, certain places will be dangerous, certain trading strategies will be fruitful, etc.
  • If you find yourself doing something extraordinarily well in a random situation, then keep doing what’s working but limit your downside. There is nothing wrong with benefitting from randomness so long as you protect yourself from negative random events.
  • Randomness means there are some strategies that work well for any given cycle (an extreme fad diet), but these cycles are often short to medium term successes. More importantly, the strategies that work for a given cycle in the short term may not be the best for long run. They are sub optimal strategies winning over a randomly beneficial short term cycle. The same can said for setting huge goals, following a fad diet, chasing an extreme training protocol, and so on. Unsustainable and suboptimal for the long term. In this way, evolutionary traits that are undesirable can survive for a period of time in any given population. That is, suboptimal strategies and traits can seem desirable in the short run even though they will be resoundingly defeated in the long run.
  • Important point: you can never affirm a statement, merely confirm its rejection. There is a big difference between “this has never happened” and “this will ever happen.” You can say the first, but never truly confirm the second. It just takes one counter example to prove all previous observations wrong. We never know things for sure, only with varying degrees of certainty.
  • There are only two types of ideas. Those that have been proven wrong and those which have yet to be proved wrong. (Feynman said something similar.)
  • Strive to become a man of leisure who can afford to sit with ideas, think properly about them, and gradually provide something of value.
  • Science is speculation. This is important to remember. Scientists are simply creating well-formed and well-educated conjectures about the world. But they are still conjectures that can be proved incorrect by one random event.
  • It’s a difficult standard to demand that you can actually implement ideas and not merely share them (there have been many brilliant philosophers and scientists who have had great ideas they didn’t personally use), but is an idea really that great if you can stick to it? Obviously, everyone has different skills and circumstances, so maybe someone can use your idea even if you can’t. But generally speaking, I think you should be able to live out the ideas you share.
  • Pascal: “the optimal strategy for humans is to believe in the existence of God. For, if God exists, then the believer will be rewarded. If God does not exist, the believer will have nothing to lose.”
    My first thought: “yes, but what if you believe in the ‘wrong’ God?” Should you play a numbers game and believe in the God most people believe in? Or, can we safely assume that of the infinite number of possible Gods humans could have designed it is unlikely that any of the ones we worship are actually the God? So, just believe that a higher power exists? Whew. Tough call here.
  • Social treadmill effect: you get rich, move to a better neighborhood, surround yourself with more successful people, and feel poor again.
  • “Remember that nobody accepts randomness in his own success, only his failure.”
  • Skewness and expectations: you can’t just look at the odds of something happening, but also the payoff you receive if it works (and the cost of it failing). A bet on something very unlikely can be smart if the payoff is large and you have rules to limit the many small losses that are likely.
  • Minor stalemates in life can often be solved by choosing randomly. In many cases it doesn’t really matter so long as you choose something and move forward.
  • We follow rules not because they are the best options, but because they make things fast and easy.
  • Humans are inherently flawed. The cognitive biases that we have are simply a result of how our brains work. Sometimes these biases help us rather than hurt us. But they are always a result of how we are built. That makes them particularly difficult to avoid.
  • We seem to focus too much on “local” changes, not global ones. That is, we care too much about the latest change rather than the overall trend.
  • “Wealth does not make people happy, but positive increases in wealth may.”
  • We do not think, but use heuristics to make decisions.
  • Emotions are “lubricants of reason.” We actually need to feel things to make decisions.
  • Emotions give us energy and they are actually critical to life in the day-to-day world. In other words, the goal here is not to become a robot who can analyze everything with perfect logic.
  • Even if you know about randomness and cognitive biases, you are still just as likely to fall victim to them.
  • How to overcome these biases? We need tricks. We are just animals and we need to re-structure our environment to control our emotions in a smart way.
  • “Most of us know pretty much how we should behave. It is the execution that is the problem, not the absence of knowledge.”
  • “I try to remind my group each week that we are all idiots and know nothing, but we have the good fortune of knowing it.”
  • Do not blame others for your failures. Even if they are at fault.
  • The only aspect of your life that fortune does not have control over is your behavior.
  • Repetitiveness is key for determining if you are seeing skill or randomness at play. Can’t repeat it? Not skillful.
  • “We favor the visible, the embedded, the personal, the narrated, and the tangible. We scorn the abstract. Everything good — aesthetics, ethics — and wrong — fooled by randomness — with us seems to flow from it.”


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Jocko Willink and Leif Babin: The Dichotomy of Leadership Book Summary


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Part I: Balancing People

Chapter 1: The Ultimate Dichotomy

There are limitless dichotomies in leadership, but none are as difficult and as central as this one: to care deeply about your people (Part I), and yet, at the same time, accept the risks necessary to accomplish the mission (Part II).

In other words, in addition to building strong relationships with your subordinates, you also need to recognize that you are a leader with a mission, aka you have a job to do.

If you care too much about your objectives, you’ll neglect your people; care more about them than is necessary and you’ll compromise the success of the mission.

A good leader always finds a way to drive his team to accomplish the mission without pushing them off a cliff.

Chapter 2: Own It All, but Empower Others

If you know your extreme ownership principles well, you should be pretty much aware that this one is the foundation upon all the others are built: effective leaders take ownership of every mistake, and never place blame on anyone else.

But this doesn’t mean that you should make every decision for everyone on your team; that’s called micromanagement and is awful; however, hands-off leadership also doesn’t work, because it usually leads to a cacophony of commands.

Effective leaders always find a balance between these two extremes:


Lack of initiative from the team Lack of vision
The team doesn’t seek solutions to problems Lack of coordination between individuals
A team doesn’t mobilize even in an emergency Actions beyond authorization
Bold and aggressive action becomes rare Failure to coordinate
No creativity Focusing on the wrong priorities
The teams stay inside their silos: no cooperation Too many people are trying to lead
An overall sense of passivity and failure to react

“With Extreme Ownership,” concludes Willink, “you are responsible for everything in your world. But you can’t make every decision. You have to empower your team to lead, to take ownership. So, you have to give them ownership.”

Chapter 3: Resolute, Not Overbearing

Leaders should be neither lenient nor overbearing’ to find the balance, they must learn when it is important for them to hold the line and when they should allow some slack; and then carefully evaluate each situation.

Two things should help you do this: understanding the concept of “leadership capital” and the power of “why.”

The former refers to the “finite amount of power that any leader possesses.” Now, you can expend it foolishly on strategically unimportant matters, or you can smartly allow your people to blow off some steam in some of these less critical areas.

Because you’ll need to exert that power when push comes to shove. And so that you can be sure that others will listen when it really matters – give them a reason to.

The why.

Chapter 4: When to Mentor, When to Fire

Another lesson from Extreme Ownership: there are no bad teams, only bad leaders. And also – the team always comes before the individual.

When an individual thinks otherwise, then you need to react: underperformers usually just need to be led properly.

However, “when a leader has done everything possible to get an individual up to speed without seeing results, the time has come to let that individual go. Don’t be too quick to fire – but don’t wait too long. Find the balance and hold the line.”

Part II: Balancing the Mission

Chapter 5: Train Hard, but Train Smart

Hard training is critical to the performance of any team; after all, there’s no growth in the comfort zone.

Consequently, training must be hard. It should push the team beyond the limits of their day-to-day easy (because learned by heart) tasks and prepare them for greater challenges; all good training focuses on three critical aspects: realism, fundamentals, and repetition.

Training must be realistic. It should push the team – and the leaders, especially – into realistic, uncomfortable situations where they aren’t sure what to do. So, role-play scenarios in which hard decisions must be made immediately.

Training must focus on the fundamentals; often people think they know them and want to skip through them, but the truth is our brain and memory don’t work that way; never skip the fundamentals lest you want to forget them.

And that brings us to the final point: training must be repetitive. Repetition is the mother of learning: one of the ultimate brain rules.

Chapter 6: Aggressive, Not Reckless

“An aggressive mindset should be the default setting of any leader,” writes Willink in Chapter 6 of The Dichotomy of Leadership.

And that’s because an aggressive mind is a proactive mind: it doesn’t mean an angry one or one that loses its temper easily. It merely means one who is trained to react in the best possible way in the worst possible scenario.

Forget your Full Metal Jackets: the only aggression which wins – and every single member of the military knows this – is the one directed towards the problem, not towards the people.

However, aggression can devolve into recklessness, especially if you get a case of that strange “disease of victory.”

Never get complacent, no matter how many victories your decisions earn.

Overconfidence is your enemy.

Chapter 7: Disciplined, Not Rigid

Alexander Pope once wrote:

True Ease in Writing comes from Art, not Chance,
As those move easiest who have learned to dance

In other words, when you learn by heart the rules that should guide your steps in a dance, you’ll suddenly feel the full freedom of movement, and walking would feel as easy as flying.

Rules give freedom; however, too much of them, stifle it.

So, never forget: leading a team is about procedures and processes because discipline gives more freedom; however when it stops doing that – then the procedures probably don’t work.

Chapter 8: Hold People Accountable, but Don’t Hold Their Hands

Accountability is an important tool, but should never be the primary one:

Instead of holding people accountable, the leader has to lead. The leader must make sure the team understands why. Make sure its members have ownership of their tasks and the ability to make adjustments as needed. Make sure they know how their task supports the overall strategic success of the mission. Make sure they know how important their specific task is to the team and what the consequences are for failure.

“A reliance on heavy accountability,” concludes the chapter, “consumes the time and focus of the leader and inhibits the trust, growth, and development of subordinates.”

Balance accountability, on the other hand, results in empowerment and educated subordinates. And that’s the goal!

Part III: Balancing Yourself

Chapter 9: A Leader and a Follower

There’s a reason why you should never allow your subordinates to feel as subordinates: it stifles their creativity and incapacitates them to make a decision when they are expected to; they’d expect that from you.

So, in other words, you should train your subordinates to be latent leaders, because sometimes your job will be to follow.

“Leaders must be willing to listen and follow others,” writes Babin, “regardless of whether they are junior or less experienced. If someone else has a great idea or specific knowledge that puts them in the best position to lead a particular project, a good leader recognizes that it doesn’t matter who gets the credit, only that the mission is accomplished in the most effective manner possible.”

Oftentimes, the best leader is the one who creates leaders.

Chapter 10: Plan, but Don’t Overplan

Usually, the team who wins is the team who is capable of seeing a little step further into the future. And, obviously, being able to plan ahead is a trait of great leaders.

However, there’s a limit beyond which planning becomes a burden; it’s, more or less, a physical limit. Unless you’re a chess player, you can’t remember a million scenarios; and even if you are, you may forget the one you need when you need it the most, and, thus, lose due to over-preparedness.

The trick is to choose three or four most probable contingencies for each phase and a worst-case scenario and prepare for them.

Everything else is probably just an iteration, and you’ll do just fine when – or even if – that happens.

Chapter 11: Humble, Not Passive

There’s a difference between being humble and being passive: the latter is one of the worst traits a leader might have and the former – one of the best ones.

In fact, Leif Babin says that is “the most important quality in a leader.” Case in point: SEAL leaders are usually fired not because of unfitness, unsoundness or incompetence – but because of arrogance.

However, the point is not to become humble to a fault, because being too humble usually leads to passivity and leaders should be all but passive.

Once again, it’s all about the balance.

“Leaders must be humble enough to listen to new ideas, willing to learn strategic insights, and open to implementing new and better tactics and strategies,” writes Babin.

“But a leader must also be ready to stand firm when there are clearly unintended consequences that negatively impact the mission and risk harm to the team. “

Chapter 12: Focused, but Detached

Naturally, it’s always good to be attentive to details; however, once again, there’s a point after which this attentiveness becomes a liability.

Just like you should never allow yourself to not see the trees because of the wood, you can’t risk not seeing the wood from the trees.

This is what “focused, but detached” means: you must find a way to analyze the details of every situation, while still not losing the sight of the big picture.

For that’s the only context in which the details really matter.


Willink and Babin conclude their exploration of the dichotomies of leadership thus:

The list of dichotomies is infinite. For every positive behavior a leader should have, it is possible to take that behavior to the extreme, where it becomes a negative. Often a leader’s greatest strength can also be his or her greatest weakness. But knowing and understanding that these dichotomies exist is the first part of keeping them from becoming a problem.

Key Lessons from “The Dichotomy of Leadership”

  1.      How to Balance Your People
    2.      How to Balance Your Mission
    3.      How to Balance Yourself

How to Balance Your People

In order to be a good leader, you need to find a great balance between some of the dichotomies of leadership.

The ultimate one concerns the two most important aspects of it: you need to both care about your people and still be willing to put them in risky situations because of your mission.

So as to do this, you need to own your mistakes, but also empower others to make theirs; you need to be resolute, but not overbearing; and you need to know when to mentor and when to fire.

How to Balance Your Mission

Balancing the mission starts before the mission itself – with training. Training must be hard, but also smart; the former is self-explanatory, the latter is based on three vital aspects: realistic situations, foundations, and repetitiveness.

To balance your mission, you need to be aggressive, not reckless, and disciplined, but not rigid. You also need to hold your people accountable but never hold their hands as well.

You’re a leader, and they expect to be led by you.

How to Balance Yourself

Balancing yourself as a leader is all about staying humbled; humbled doesn’t mean staying passive – it means staying open to suggestions and ideas. In other words, humble leaders also know when it’s best for the team to be followers as well.

Humble leaders are also focused, but never detached; and they know when planning becomes overplanning.




50 Words to Your Dreams Chapter 29 Health by Michael George Knight

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Health is defined as the state of being free from illness or injury. You have heard the saying that health is wealth. What if one day soon you were given a diagnosis from a doctor that you had a terminal illness and only had a few months to live? What wealth would you give for your health? Once your health becomes threatened your priorities quickly shift to making your health number one. But why wait for your health to become threatened to make it a priority number one?


Make the best investment you will ever make, invest in your health. Start by making health a lifelong study and a practice. Aim to improve your health each day, week, month and year. Drop unhealthy habits you currently have and acquire new healthy habits. Simple things like eating better, working out, losing weight or sleeping more. You don’t want to wake up one day in the future with a diagnosis that you could have prevented by looking after yourself. Start today and get serious about your health, it is your only wealth in life.



Your current state of health is a result of your past actions and habits. Think of someone healthy in your life and think about the healthy habits they have? Think of someone unhealthy in your life and think about the unhealthy habits they have? This little exercise clearly shows that health and habits go hand and hand. Take a look at your life and notice your healthy habits and unhealthy habits. What do you do habitually to maintain good health? What unhealthy habits have you formed that is affecting your health? Are you eating the healthiest foods? Doing enough exercise? Getting enough sleep? Maintaining your energy levels so you can get the most out of each day? By developing the healthy habits and eliminating the unhealthy habits you will affect your life in more positive ways than you can imagine.



This famous quote spoken by Hippocrates rings so true, it’s hard to ignore. Spoken nearly 2,500 years ago and truer than ever. Food can either cause disease or it can cure disease. Food gives us life and it can also take our life. It’s all about what you eat and most importantly what you do not eat on a consistent basis that will determine your state of health. Having your diet consisting mainly of processed foods, oil, sweets, refined grains, sugar and junk food will not provide you with optimal health. A diet like this will cause dis-ease as our bodies genetically have not evolved to eat the current Standard American Diet which has spread around the world. With 100’s of different types of diets out there in existence telling you what to eat and what not to eat, I’ll let you figure out which one is right for you. But we can all agree what current foods are doing most of the damage to societies health and waistline. Show yourself some self-love and become the healthiest version of yourself.



Health is not solely all about the physical but also health is about the thing between your two ears, your mental health.  Your state of well-being mentality, how you cope with the normal stresses of life, how you manage the inner game of life and the search for happiness and joy. Mental health is becoming a very talked about subject in todays day and age. With mental illness such as anxiety, depression, substance abuse and suicide affecting more and more individuals and families. Mental health is not something society can sweep under the rug any longer. With a number of growing mental health institutions arising, help is their if needed. You can take a few simple small steps to keep your mental health in check such as get outside more, build relationships and socialize with friends, exercise and stay healthly, develop gratitude, give to others and don’t keep things bottled up inside.



  • A feeble body weakens the mind. (Jean-Jacques Rousseau)
  • A good laugh and a long sleep are the two best cures for anything. (Irish Proverb)
  • A healthy outside starts from the inside. (Robert Urich)
  • Begin to see yourself as a soul with a body rather than a body with a soul. (Wayne Dyer)
  • Body and mind are not two separate entities. Bodymind is a single system, so when the mind becomes tense, the body becomes tense. (Osho)
  • Body and mind are one. (Thich Nhat Hanh)
  • Cheerfulness is the best promoter of health and is as friendly to the mind as to the body. (Joseph Addison)
  • Courting calories becomes completely unnecessary when your food doesn’t have labels. (Unknown)
  • Create a life that feels good on the inside, not one that just looks good on the outside. (Unknown)
  • Did you ever realize how much your body loves you? It’s always trying to keep you alive. It’s always trying to keep you alive. It’s making sure you breathe while you sleep, stopping cuts from bleeding, fixing broken bones, finding ways to beat the illnesses that might get you. Your body literally loves you so much. It’s time you start loving it back. (Unknown)
  • Digging earlier graves with our teeth. (Les Brown)
  • Early to bed, and early to rise, makes a man healthy, wealthy and wise. (Benjamin Franklin)
  • Eating well is a form of self-respect. (Unknown)
  • Every intelligent person knows that stimulation in excess, through alcoholic drink and narcotics, is a form of intemperance which destroys the vital organs of the body, including the brain. (Napoleon Hill)
  • Everything heals. Your body heals. Your heart heals. The mind heals. Wounds heal. Your soul repairs itself. Your happiness is always going to come back. Bad times don’t last. (Unknown)
  • Give your body the right food and it will do the right thing. (T Colin Campbell)
  • Happier thoughts lead to essentially a happier biochemistry. A happier, healthier body. Negative thoughts and stress have been shown to seriously degrade the body and the functioning of the brain, because it’s our thoughts and emotions that are continuously reassembling, reorganizing, re-creating our body. (Dr. John Hagelin)
  • Happy, optimistic people have better chance of enhancing their immune system. (Unknown)
  • Health is not guaranteed in life. Health is a commission for taking care of yourself and your mind. When a person successfully sells himself on eating right, working out, and taking care of his attitude, he gets a commission of having good health. (Grant Cardone)
  • Health is the greatest gift, contentment the greatest wealth, faithfulness the best relationship. (Buddha)
  • Homicide is 0.8% of deaths. Diet-related disease is over 60%. But no one talks about it. (Jamie Oliver)
  • Honour the physical temple that houses you by eating healthfully, exercising, listening to your body’s needs, and treating it with dignity and love. (Wayne Dyer)
  • How we think we feel has a definite effect on how we actually feel physically. (Norman Vincent Peale)
  • I’ve never seen fat skeletons. (Unknown)
  • If anything is sacred, the human body is sacred. (Walt Whitman)
  • If you achieve all kinds of things in the material world, but you lose your health or your peace of mind, you get little or no pleasure from your other accomplishments. (Brian Tracy)
  • If you act healthy, you will feel healthy. (Og Mandino)
  • If you think eating healthy is expensive, just wait till you see the medical bills from eating cheap crappy food. (Unknown)
  • Ill health. No person may enjoy outstanding success without good health. (Napoleon Hill)
  • It takes 4 weeks for you to see your body change, 8 weeks for your friends and family and 12 for the rest of the world, keep going. (Unknown)
  • Make it a habit to feel the inner body as often as you can. (Eckhart Tolle)
  • Make rest a necessity, not an objective. (Jim Rohn)
  • Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. (Dalai Lama)
  • Many people consider a raw food diet to be “radical”. Now consider this: There are roughly 1,800,000 species that eat raw food, yet only 1 that eats cooked. (Unknown)
  • Many people suffer poor health not because of what they eat, but from what is eating them. Emotional ills turn in upon yourself, sapping your energy, reducing your efficiency, causing deterioration in your health. And, of course, they siphon off your happiness. (Norman Vincent Peale)
  • People are fed by the food industry, which pays no attention to health, and are treated by the health industry, which pays no attention to food. (Wendell Berry)
  • People who laugh actually live longer than those who don’t laugh. Few people realize that health actually varies according to the amount of their laughter. (Og Mandino)
  • Physical fitness is not only one of the most important keys to a healthy body, it is the basis of dynamic and creative intellectual activity. (John F. Kennedy)
  • Physical fitness is of tremendous importance for the simple reason that neither the mind nor body can function well without it. Therefore, give attention to your habits of life, proper diet, healthful exercise and fresh air. (Napoleon Hill)
  • Realize that your body works for you, not against you. (John Demartini)
  • Recognize the connection between negative emotional states and physical disease. (Eckhart Tolle)
  • Rules for a healthy living. Less soda, more water. Less alcohol, more tea. Less sugar, more fruits. Less meat, more vegetables. Less driving, more walking. Less worry, more sleep. Less anger, more laughter. Less words, more action. (Unknown)
  • Some things you have to do every day. Eating seven apples on Saturday night instead of one a day just isn’t going to get the job done. (Jim Rohn)
  • Stop running on caffeine and adrenalin. Fuel your body with premium fuel and it will provide you with the strength and stamina to live well. Caring for your body is essential to living a high-quality life. (Cheryl Richardson)
  • Stress suppresses the body’s immune system, interrupts your sleep, and makes you vulnerable to all manner of illnesses. (Zig Ziglar)
  • Take care of your body. It’s the only place you have to live. (Jim Rohn)
  • The best eight doctors: Sunshine, water, rest, air, exercise, diet, music, love. (Unknown)
  • The body heals with play, the mind heals with laughter and the spirit heals with joy. (Proverb)
  • The body is your temple. Keep it pure and clean for the soul to reside in. (B.K.S Iyengar)
  • The chief function of the body is to carry the brain around. (Thomas Edison)
  • The doctor of the future will give no medication, but will interest his patients in the care of the human frame, diet and in the cause and prevention of disease. (Thomas Edison)
  • The evidence is overwhelming that to be mentally sharp you need to be physically sharp. (Zig Ziglar)
  • The foundation of success in life is good health: that is the substratum of fortune; it is also the basis of happiness. A person cannot accumulate a fortune very well when he is sick. (P.T. Barnum)
  • The greatest medicine of all is to teach people how not to need it. (David Wolfe)
  • The happier you are about yourself and your life, the healthier you will be. It’s never too late to change. (Tom Hopkins)
  • The human body is the best picture of the human soul. (Ludwig Wittgenstein)
  • The problem is we are not eating food anymore, we are eating food-like products. (Alejandro Junger)
  • The winners in life treat their body as if it were a magnificent spacecraft that gives them the finest transportation and endurance for their lives. (Denis Waitley)
  • There are too many people counting calories and not enough people counting chemicals. (Unknown)
  • There is more wisdom in your body than in your deepest philosophy. (Friedrich Nietzsche)
  • Those who don’t exercise cut themselves off from nature’s greatest mental healer, sweat. (Tom Hopkins)
  • To keep the body in good health is a duty, otherwise we shall not be able to keep our mind strong and clear. (Buddha)
  • Today more than 95% of all chronic diseases is caused by food choice, toxic food ingredients, nutritional deficiencies and lack of physical exercise. (Mike Adams)
  • Treat your body like a temple, not a woodshed. The mind and body work together. Your body needs to be a good support system for the mind and spirit. If you take good care of it, your body can take you wherever you want to go, with the power and strength and energy and vitality you will need to get there. (Jim Rohn)
  • When diet is wrong, medicine is of no use. When diet is correct, medicine is of no need. (Ancient Ayurvedic Proverb)
  • When you gain control of your body, you will gain control of your life. (Bill Phillips)
  • When you nourish your body with pure energy, you transform from the inside out. (Bill Phillips)
  • Why do they call it ‘alternative medicine’ when it is the original medicine that humans have been using for thousands of years? Chemical medications were discovered about 100 years ago (Unknown)
  • Without rest and recovery, the body has no chance to rid itself of toxins, physical and mental. (Jim Loehr)
  • You are what you eat. So don’t be fast, cheap, easy or fake. (Unknown)
  • You can’t get healthier until you give up what is making you unhealthy. (Larry Winget)
  • Your body is constructed in such a way that if you just stop doing certain things to it, it often recovers and becomes healthy and energetic all by itself. (Brian Tracy)

Jesse Itzler: Living with a SEAL: 31 Days Training with the Toughest Man on the Planet Book Summary

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  • Routine can also be a rut. Many of us live our lives on autopilot. We do the same thing every day; wake up, go to work, come home, have dinner. Repeat.
  • Research shows that stepping out of our routines in life is great for the body and spirit…the brain too. Mix it up! Do the outrageous; think out of the box. Life is short, why not? As SEAL says, “this ain’t a dress rehearsal, bitch.”
  • Break up that same routine.
  • Failure is just life’s way of nudging you and letting you know you’re off course.
  • Any time when you live a little outside of the norm people look at you: (a) with some admiration and (b) like you’re crazy.
  • The journey really is more important than the destination.
  • You can be fit without being healthy, but you can’t be healthy without being fit. Meaning…you can be in great shape on the outside, but if you don’t eat great and don’t take care of your insides, you aren’t necessarily healthy. History shows us there were plenty of athletes who were in great shape but suddenly died of heart attack. Balance is key.
  • What would SEAL Do?
  • The persistence and perseverance to achieve a long-term goal is a key driver to success.
  • Never Quit. And by constantly putting myself in situations that are challenging.


  • Money is fun to make, fun to spend, and fun to give away. That sums it all up.
  • Think of money as a big magnifying glass. If you are a good person before you had money…then money makes you an even better person. If you were a charitable person before you had money…then money makes you even more charitable. But if you were an asshole before you had money…well then, money makes you an even bigger asshole.


  • Nickels and dimes. Five pull-ups (nickles) and then ten push-ups (dimes) every minute on the minute. Start every time the second hand is on the 12. If you finish in forty seconds, then you have twenty seconds of rest.


  • I eat only fruit until noon, read Fit for Life by Harvey Diamond.
  • We use more energy for digestion than all other bodily functions combined. That’s why we are usually tired after a big meal. That said, the average American will eat seventy tons of food in their lifetime. Imagine how hard the body has to work to process and break down all of that food. The more efficiently we can digest all this food and the less stress we put on the digestive process, the more energy we will have for everything else.
  • According to Fit for Life, fruit is the perfect food because on top of being sweet and delicious, it’s super-easy to digest. In fact, it is the only food that bypasses the stomach and is digested in the small intestines.


  • Every day do something that makes you uncomfortable.
  • Control your mind.
  • I like to sit back and enjoy the pain. I earned it.
  • I’m the surprise-or. Not the surprise-ee.
  • I don’t do shit for applauses. I don’t do shit for fanfare. I do shit for me.
  • I don’t think about yesterday. I think about today and getting better.
  • It doesn’t have to be fun. It has to be effective.
  • Don’t EVER underestimate the power of adrenaline.
  • When you think you’re done, you’re only at forty percent of what your body is capable of doing. That’s just the limit that we put on ourselves.
  • I don’t need new friends. I like to keep my shit lean and tight.
  • If it doesn’t suck, we don’t do it.
  • I just like to go to sleep hungry…so I wake up hungry. Life is all about staying out of your comfort zone.
  • If you want to be pushed to your limits, you have to train to your limits.
  • Whatever you got going on, someone else has more pain. You gotta learn how to fight through it. No matter what it is…Think about someone else and take a suck-shit pill.
  • You can get through any workout because everything ends.
  • Don’t get too comfortable. Ever.
  • It’s not what you do, it’s when and how you do it. It’s all about the conditions. Remember that.
  • Finish the first thing on my list with 100 percent focus and then attack the next.
  • Fear is one of the best motivators. Anger is the other.
  • I don’t celebrate victories, but I learn from failures.
  • With fitness there’s never a finish line. You can always do better.
  • If you don’t challenge yourself, you don’t know yourself.
  • I don’t stop when I’m tired. I stop when I’m done.
  • I just think you don’t give your lives enough credit.
  • If you can see yourself doing something, you can do it. If you can’t see yourself doing something, usually you can’t achieve it.
  • The only easy day was yesterday.
  • You only get one shot at life and you should find out what’s in your reserve tank. Coasting is for “pussies.”

Robin Sharma: The 5 AM Club: Own Your Morning. Elevate Your Life Book Summary

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DOWNLOAD THE PDF SUMMARY HERE: The 5am Club by Robin Sharma


Once upon a time there was a billionaire. He’d reached the true elite, achieving epic results in both professional and personal spheres. He was a man who would leave a legacy for the world. But the secret to his success was a surprising one. He attributed his success not to his natural talents, nor to the hours he had invested in his work. He attributed it to a revolutionary morning routine, built around rising at 5 a.m. and following a little known formula designed to turbocharge his mental focus, build his physical fitness and encourage him to be his best self day in and day out.

With this summary, you too can join the 5am club. You can learn how to rise each day and embrace the solitude, silence and lack of distraction the early hours of the morning can offer. Read on, and you’ll learn how true elite performers in all walks of life get ahead by making the most of a time of day that others use to sleep, waste time watching the news, or browse social media.


In this you’ll learn:

  • why freedom from distraction helps you to achieve better results;
  • why slowing down your brain through transient hypofrontalityis so important; and
  • how to build the routine of an elite performer.



This is the fictitious tale of a curious group of people: A depressed entrepreneur, in need of revitalization; a frustrated artist, trying to refuel his creativity and develop a legacy; and a billionaire with a string of successes behind him and a desire to pass on the knowledge of how to live an extraordinary life.

The three met at a personal optimization conference addressed by a legendary business guru, the Spellbinder, someone renowned for his ability to weave magic and captivate his audience with the power of his insights. The billionaire approached the entrepreneur and the artist after the Spellbinder’s speech had finished but they didn’t know that he was a billionaire. The billionaire was disguised as a poor man, a habit he had developed to remind himself that money isn’t everything. The only clue to his actual wealth was his expensive watch. The impoverished-looking billionaire told the two that he’d made a fortune thanks to the Spellbinder, who’d taught him that while many people wish that extraordinary things will happen to them, truly elite performers learn that they can make extraordinary things happen themselves.

The entrepreneur and the artist became more and more curious about this mysterious man who talked like he was a guru himself. They listened as the billionaire explained how the Spellbinder – who, in fact, was the billionaire’s personal mentor – had taught him one thing that was more important than anything else.

What was it? That the most reliable way to generate the best results in your personal and professional life is to build a world-beating morning routine. Being a generous man, the billionaire made an incredible offer. If the entrepreneur and artist wanted to come hang with him at his beach house in Mauritius, he would teach them the secrets of a world-class morning routine. All they needed to do was meet the next morning at 5 a.m..

The entrepreneur and the artist were a little skeptical the next morning, but it started to soften when a chauffeur-driven Rolls-Royce collected them and delivered them to a hangar containing a sleek, ivory-colored private jet, which bore the logo: “5AC.”

The entrepreneur asked the chauffeur what the logo meant, and he explained that it stood for “The 5am Club.” And so began their journey toward understanding a revolutionary morning routine and a whole new outlook on life with the potential to transform everything for the better.


Early the next morning, the billionaire told the entrepreneur and artist how getting up at 5 a.m. was the way he had learned to escape mediocrity and achieve greatness. Getting up at 5 a.m. had promoted his creativity, doubled his energy, and tripled his productivity. How?

Well, the billionaire told them, many true greats throughout history, from novelist John Grisham to composer Wolfgang Mozart, have understood that the isolation that comes from getting up at 5 a.m. has a multiplying effect.

All of us have limited mental capacity or cognitive bandwidth. And throughout the day, our attention is given to more and more things: work, the news, interaction with others and social media. Our bandwidth gets used up by all of these so, by lunchtime, we can’t really concentrate on anything at all. By constantly shifting our focus from one thing to another, we give nothing enough attention. But if you get up at 5 a.m., you have a golden opportunity to focus on one high-value activity without your brain getting distracted.

This focus is further enhanced by the concept of transient hypofrontality, which means, in a nutshell, that at 5 a.m., you are well placed to achieve a state of flow in your thinking.

That’s because, the billionaire explained, when you are enjoying a peaceful 5 a.m. start, the brain’s prefrontal cortex, which handles rational thought, temporarily shuts down. So your tendency to analyze, stress and worry about things is impaired. At the same time, the peace of daybreak stimulates the production of the neurotransmitters dopamine and serotonin. The result? You naturally enter a state of flow: of being fully energized, focused and in the zone. Flow is the elite mind-set that all top performers, from violinists to scientists, inhabit in their finest moments. So you’ll find that if you get up at 5 a.m., you’ll be more focused and more productive for the entire day.

If you want another reason why joining the 5am club is a good idea, consider this: to get the results of the top 5 percent of elite performers, you need to do what 95 percent of entrepreneurs, artists and other people are unwilling to do. Most people aren’t willing to get up at 5 a.m. so if you are, you have a huge competitive advantage.


Now let’s take a look at how to not just achieve great things, but to become a true history maker, a person whose achievements change the world.



On a dazzling morning in Mauritius, the entrepreneur, the artist, and the billionaire gathered by the sea. A school of squirrelfish swam through the crystal clear waters. In this beautiful setting, the billionaire recounted the four focuses of the great history makers.

Firstly, he said, the greatest people are defined not by their natural talent, but by the extent to which they capitalize. According to the billionaire, self-discipline and perseverance always trump talent and giftedness. So rather than thinking you don’t have what it takes, capitalize on the gifts you’ve got to make a difference.


Secondly, the billionaire explained, freedom from distraction is key. Too many people today waste hours on addictive but hollow technology and social media. If you want to win, you need to focus, simplify, and concentrate. That means becoming a purist, concentrating on a few amazing work projects rather than many good ones. And in day-to-day life, it means stripping out everything that distracts you from a relentless focus on what’s most important. So turn off your notifications and cancel pointless meetings that are taking you away from activities that really add value. Gain a distraction-free hour each morning to focus on what’s important by joining the 5am club.


Thirdly, the truly great understand the power of day-stacking. That means that small things done daily are way more important than big things done once in a while. Consider enhancing one ability or skill by just one percent every day. It’s a small change, but over a year it amounts to a 365 percent improvement!


Finally, the billionaire shared the final focus of historymakers: personal mastery practice. According to psychologist Anders Ericsson, a person must invest at least 2.75 hours of daily practice in a skill for ten years for the first signs of an elite-level of mastery to appear. So if you want to master yourself, you should spend your first hour each morning working deeply on you, your mind-set and also your approach to health, spirituality and love.

The entrepreneur and artist now understood much more clearly how the truly elite stay ahead, so the billionaire said it was time to take things to the next level: It was time for them to understand how to cultivate their best selves.


How often, asked the billionaire, have you heard a guru talk about improving your mind-set? We hear it all the time – think optimistic thoughts, and you’ll improve your life.

But, said the billionaire, strolling along a white sand beach with his pupils, what these gurus don’t tell you is that your Mindset is just one of four “interior empires.” If you’re only working on your Mindset, you’re ignoring your Healthset, your Heartset, and your Soulset. That’s like only polishing 25 percent of a picture!

Your Heartset is your emotional life and well-being. It’s important because, even with a world-class Mindset, you can’t deliver intellectually if your emotional life is a mess. As Sigmund Freud noted, “unexpressed emotions will never die. They are buried alive and they will come forth later in uglier ways.” So focus on a healthy Heartset and you’ll soon feel the difference.

Next, give your Healthset – your physical health – some attention. One of the key ways to get ahead in life is longevity. As the billionaire jokingly pointed out, you can’t be a titan of industry if you’re dead. Committing to optimal fitness allows you a couple of extra ultra-healthy and productive decades to build a greater legacy. What’s more, elite performers realize that every day becomes far better with exercise. It ignites your energy, dissolves your stress and expands your joy. But even that isn’t enough, as there’s another interior empire to cultivate.

Your Soulset, the billionaire explained, is your spirituality. Too often, everyday life pulls us toward the superficial and the material. So take some time in the quiet moments of the early morning to remember who you truly are. Bond with the hero inside of you. In the silence of the dawn, meditate on what you have to offer the world. Focus on your Soulset, and you’ll reconnect with the very best part of yourself.

The entrepreneur remarked that this framework really changed his perception of himself, leading him to ask how he could use the first hour of the day to effectively apply it.

The billionaire replied, telling him that he was ready to hear about the 20/20/20 formula, but not in Mauritius, but in The Eternal City – Rome. It was time to be inspired by the passion of the Roman people, the city’s architecture, and its divine food.


Standing in the square at the bottom of Rome’s famous Spanish Steps, the billionaire, the entrepreneur and the artist took in their surroundings.

It’s time, the billionaire said, to learn how you can transform your creativity, performance, utility, wealth and productivity. Just rising at 5 a.m. alone won’t do it. You could rise at 5 a.m. and waste an hour scanning social media and checking messages, but that won’t optimize your day. What will is the 20/20/20 formula that says you use 20 minutes to move, 20 minutes to reflect and 20 minutes to grow.

The first step is to move – to perform vigorous exercise for 20 minutes. What’s really important is to make yourself sweat. That’s because sweat gets rid of cortisol, the hormone of fear. Sweat generates the protein BDNF, or brain-derived neurotrophic factor, which repairs brain cells and accelerates the formation of new neural connections. So by sweating for 20 minutes, it literally means you’ll think faster!


Then, make 5.20-5.40 a.m. a time for reflection with a period of deep peace and solitude. Before the complexity of the day emerges, reflect on what is most important to you. In an age of distraction, of constant notifications and messages, you’ll be amazed what visions, dreams and inspiration drift into your mind when you have a few moments of silence to yourself.

Write these thoughts in a journal. Commit your current ambitions, the things you’re grateful for in your life, and your frustrations and disappointments to paper. Doing so will help you understand your vision and let go of toxic, negative energies.

Take a few minutes to meditate. Research shows that meditation helps lower cortisol, reducing your stress. It’s a proven way to stay calm, and the great performers of the world are always calm!

Now it’s time for the last 20 minutes of your first hour. Here, you need to grow, so take 20 minutes to learn. Study the lives of great achievers by reading their biographies. Learn about human psychology. Watch documentaries on innovation, or listen to audiobooks about business building. One thing every billionaire has in common is a love of learning.

So there you have it. A perfect morning routine, to make the hour your own and become a true member of the 5am club.


As the city of Rome slowly came to life, the billionaire, entrepreneur and artist ventured down into the depths of the city. As they descended down a dark and dusty tunnel, the billionaire announced that they were in the catacombs – underground passages used as burial grounds by the ancient Romans.

The artist asked why they were there and the billionaire explained that they were surrounded by people in a centuries-old-slumber, so it was an appropriate place to discuss the importance of deep sleep.

Research has shown that sleep is one of the key factors in predicting life expectancy. How you spend the last hour of your day is almost as important to peak performance as how you spend the first.

Too many people today are in a state of sleep deprivation, driven by technology. Research shows that the blue light emitted by our devices reduces levels of melatonin – the chemical that induces sleep. Being in front of a screen before sleep will prevent you from sleeping properly, so turn off your technology no later than 8 p.m. Spend the rest of the evening talking with loved ones, meditating, having a relaxing bath or reading and go to bed no later than 10 p.m. That way, you can truly maximize the value of your 5 a.m. time.

Sleeping isn’t the only important way to rejuvenate yourself. In fact, a key to top performance over time is to oscillate between periods of passionate, focused work at the highest levels and periods of time for deep refueling through relaxation, recovery and fun. It’s a process that the billionaire calls the twin-cycle of elite performance.

Growth happens not just in the performance phase, but also in the recovery phase. If you want to understand why, said the billionaire, talk to a farmer. He’ll tell you that there is always an intense period of tilling soil, planting crops and serious work. But after that, is the fallow season. The fallow season might look like a period of rest. It looks like nothing’s happening. But really, it’s the fallow season, in which the soil is resting and replenishing its nutrients, that predicts how well crops are really going to blossom.

Some of us don’t like to embrace the rest part of the twin-cycle. The entrepreneur recognized this, saying that if he isn’t working, he feels guilty. But, as the billionaire replied, balance is important. So don’t just work. Embrace rest, relaxation and fun, safe in the knowledge that it’s a key part of elite performance.


The key message in this summary

The first hours of the day are where heroes are made. If you want to master your life, start by owning the mornings. Freedom from distraction at 5 a.m. will allow you to build your creativity, maximize your fitness and protect your serenity in an age of complexity.


Actionable advice:

Set your alarm clock half an hour fast and trick yourself into getting up at 5 a.m.

Firstly, buy an alarm clock. Technology is distracting and should never be in the bedroom. Once you’ve got a nice old fashioned clock, set it half an hour fast. Set yourself an alarm for 5.30 a.m. That way, when you wake up the next morning, you’re tricking yourself into thinking you are getting up later. When the alarm goes off, jump out of bed immediately, before the weaker part of your character can come up with reasons to stay under the duvet.


Shout out to for doing this written summary

Joseph Campbell: The Hero with a Thousand Faces Book Summary


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The Monomyth

  • Campbell jumps right in, discussing recent anthropological studies that have benefited from a mythic approach.
  • Psychology, too, he says, is down with those mythic vibes, in part because they help people – even modern people – understand what drives them.
  • He tells the story of a young American man who dreamed that he accidentally killed his father by dropping a hammer off the roof.
  • His mother comforts him in the dream, and Campbell points out how Freudian this all is.
  • He explains how the father represents danger, the mother safety, and how killing the father to enjoy the attentions of the mother was pretty much what Freud was all about.
  • You can find this idea in ancient stories such as Oedipus, whose famous complex was based on killing his father and marrying his mother.
  • Campbell talks about another dream, this one from a woman afraid of a big white horse following her.
  • The horse is sent to a barbershop and comes out as a man.
  • Campbell talks about how the dream represents the way we face our fears: leaping into the unknown where there’s great danger…but also rewards and treasures too.
  • He discusses psychoanalysis, the science of reading dreams, and says that ancient cultures had their own rituals for reading dreams too.
  • Dreams, and the stories that come from them, speak to the painful transitions we experience in life: growing up, finding a spouse, working hard for the things we want, saying goodbye to family members who die, and so on.
  • Mythology provides symbols to help us understand these transitions in life, and how our triumphs and heartbreaks can be reflected in those symbols.
  • In short, if we want to know how to be brave in the face of trouble, to enjoy the good things life sends our way, and to understand why life works the way it does, we look to our myths.
  • In the modern world, we try to halt the progress of life: we want to stay young, stay strong, never grow old, and never die.
  • In Campbell’s opinion, this isn’t a healthy way to live.
  • Men dream of childhood heroes while being doctors and lawyers and such.
  • Women look for love while men are away.
  • According to Freud, the first half of life focuses on the rising sun: the goals and dreams we want to achieve when we head out into the world.
  • The second half of life involves an inversion of that, dealing with the eventual return to the grave.
  • He tells the Greek myth of King Minos, who was busy with being king and ignored his wife.
  • His wife fell in love with a bull and gave birth to a monster, the Minotaur, which was caged in an elaborate maze beneath King Minos’s palace
  • Campbell explains that Minos, not the queen, is to blame for this because he’s seduced by the material things of this world…which creates monsters.
  • Heroes are created to deal with monsters, and the rewards heroes reap aren’t just for them – like Minos and his selfish pursuit of gain – but for everyone.
  • When monsters are created, they’re a sign of spiritual death.
  • When heroes crush those monsters, they signal a spiritual rebirth.
  • That’s the essence of the Hero’s Journey.
  • The hero (or heroine) can survive adversity, brave dark paths, and fight through all their own weaknesses and self-doubts.
  • In the process, they can save the people of their community who choose a less adventurous life.
  • Campbell finishes the story of the Minotaur with the arrival of Theseus.
  • Minos’s daughter Ariadne falls in love with Theseus and turns to him for help in solving the labyrinth: just as we normal people turn to the hero for help in unraveling the labyrinth of our fears and problems.
  • Campbell breaks his chapters into individual sections, and because those sections contain specific steps in the Hero’s Journey, we’re not about to leave them out here.

Comedy and Tragedy

  • Modern literature, Campbell claims, is focused on failures, flaws and the shortcomings of human existence; in short, it’s often tragic.
  • Comedy serves as satire, but not as any logical expression of happiness or joy.
  • Fairy tales and myths fill in that gap, providing triumph, success and fulfillment in a dramatic context, and redeeming us.

The Hero and the God

  • The arc of a mythic tale can be summed up in three words: separation, initiation, return.
  • The hero leaves the mundane world, faces challenges, gains skills and becomes an adult, only to return to his place of origin and share the bounty of what he has earned.
  • Examples follow (oh man, Campbell loves his examples): Jason and the Golden Fleece, Prometheus, the story of the Buddha, Moses, and others.
  • Campbell then lays out the basic pattern of this story, and the steps it encompasses (we’re not gonna list it because each step has its own chapter).
  • He stresses the importance of the hero returning from his or her adventure to share the rewards with the whole community.
  • That’s what separates a hero from a selfish person like Minos.
  • The powers the hero brings are powers that have been in him or her all the time, and only need to be brought out with the trials of his or her adventure.
  • The hero and the god are thus one and the same: mirror images of each other that the hero’s journey has brought out.
  • This theme recurs in stories told throughout the world.

The World Navel

  • The purpose of the Hero’s Journey is to release the power of the divine into the world: to reconnect us with the primal forces of the universe.
  • The divine energy is surrounded by the universe: The World Navel.
  • The World Navel brings both good and evil, linked together just like everything else in the universe.

The Call to Adventure

  • The chapter opens with a retelling of the famous fairy tale “The Princess and the Frog.”
  • A princess drops her golden ball in the water, where it sinks deep down to the bottom.
  • A frog asks if he can help and the princess promises him anything if he can get the ball back.
  • The frog returns the ball, and asks to be her companion in exchange.
  • She’s grossed out by him, but what’s a girl gonna do? (Don’t worry. As you may suspect, he turns into a handsome prince when she finally decides to kiss him.)
  • The frog returning the princess’s golden ball to her is an example of the call to adventure.
  • The call is a crisis: something that spurs the hero or heroine into action.
  • The call involves danger, peril and dark places like a forest (or the bottom of a pond, to follow the princess and the frog).
  • A herald is involved, announcing the danger or the task to be undertaken.
  • More examples follow, including King Arthur and the story of an Indian woman from North America.
  • The hero belongs to an ordinary community when the call arrives, and his or her energy is realigned from inside the community to outside of it.

Refusal of the Call

  • Sometimes the hero doesn’t answer the call or want to take up the task.
  • The story makes it very clear: refusing the call is a bad idea.
  • Why? Because it leads to stagnation and a refusal to advance forward in life.
  • The divine being linked to the hero harasses him or her constantly, trapping him or her in a symbolic labyrinth.
  • Example? We got one! How about the story of Daphne, who flees from the loving arms of the god Apollo and gets turned into a laurel tree as a result?
  • Campbell notes that the philosopher Carl Jung believes that psychoanalysis finds patterns and fixations very similar to the story of Daphne.
  • Campbell relates the stories of Sleeping Beauty and Kamar al-Zaman from Arabian Nights to demonstrate what happens when the hero refuses the call.

Supernatural Aid

  • For heroes who don’t refuse the call, their first encounter with the outside world and the challenges they need to face is with a mentor.
  • This is a wizard, dwarf or some similar figure who provides protection for the hero on the first stage of the journey.
  • This could be the Blessed Virgin in Christian stories, the Spider-Woman in African stories, a wizard, a god like Hermes, or others.
  • The mentor represents destiny and serves as a comfort and a reassurance for the hero on his or her adventures.
  • In some cases, the mentor is also the herald who starts the whole thing rolling with the call to adventure.

The Crossing of the First Threshold

  • With destiny having taken a friendly (and usually bearded) form, the hero moves forward until meeting a “threshold guardian.”
  • Beyond this guardian lies the unknown: darkness, danger, the general “Here Be Dragons” thing.
  • The guardian is usually tricky and deceitful, not what he or she first appears….but s/he holds wisdom about the darkness too: two key aspects in the figure.
  • Another avalanche of examples from all over the world follows: Pan in Greek mythology, the Russian “Water Grandfather,” and others.
  • The guardian can be protective, warning the hero from venturing past the known world; yet, only by passing the guardian can the hero gain the knowledge and the power that he or she needs.
  • By passing or defeating the guardian, the hero enters a new stage of existence, leaving his or her old life behind.

The Belly of the Whale

  • Having passed the first threshold, the hero enters a womblike state called “the belly of the whale.”
  • We know what you’re picturing—this always makes us think of Pinocchio, too.
  • He or she is swallowed up by the power of the threshold – symbolized by a sea monster or something similar – and seems to have died.
  • Crossing the threshold can be seen as a kind of self-annihilation, or – less gruesomely – a transformation into another state of being.
  • And, as usual, Campbell wraps up with some more examples.
  • So many examples.


The Road of Trials

  • Once the first threshold is passed, the hero faces a series of challenges that he or she must overcome.
  • Campbell tells the story of Cupid and Psyche as an example of the challenges faced on the road of trials: surviving the wrath of Venus with help from an army of ants.
  • He follows with a report from the ancient Lapps about a shaman who needs to handle a number of different obstacles during a supposed visit from the land of the dead.
  • Any figure who undertakes the Hero’s Journey comes across a “spiritual labyrinth,” populated by “symbolic figures” that test him or her.
  • This is a part of a ritualistic cleansing, focusing the hero on spiritual rather than worldly matters.
  • In dreams, we still face these obstacles, often with no idea how to vanquish them.
  • The hero’s obstacles are symbolic of those fears and anxieties in our dreams.
  • Example time: the goddess Inanna’s descent into the underworld from ancient Sumerian mythology.

The Meeting with the Goddess

  • Once the obstacles are overcome, the hero joins with “the Queen Goddess of the World,” which is not, in fact, Oprah Winfrey’s new title but rather the representation of the whole universe.
  • The encounter with her usually takes place at the edge of the world, or the bottom, or somewhere else where you literally can’t go any further.
  • Example du jour: The Prince of the Lonesome Isle, from Ireland, who meets with the Queen of Tubber Tintye.
  • The Queen represents the feminine in all its forms: mother, lover, sister, friend.
  • She is all the gifts and the bounties of the earthly world: the promise of perfection.
  • She can also be a bad mother or lover: selfish, forbidding or in some cases absent entirely.
  • The example for this second part of the goddess is Diana, who turned the hunter Actaeon into a stag when he spotted her bathing in the nude.
  • The first part of the Queen Goddess, on the other hand, is the all-nurturing mother, with accompanying examples from the Tantric books from India (cue the slinky music).
  • But she’s also the embodiment of death and the end of the world: womb and tomb in one.
  • His example concerns the 19th century Hindu mystic Ramakrishna, who oversaw a temple dedicated to both sides of the Goddess.
  • She’s the embodiment of the whole world: everything within it, good and bad alike.
  • She guides the hero into a new state: one freed of limitations where everything is possible.
  • We are then treated to the story of the five sons of the Irish king Eochaid.
  • The hero wins over the goddess not with cleverness or strength, but with a “gentle heart.”
  • If it’s a heroine instead of a hero, she proves herself fit to be the consort or companion of a god.
  • If she’s searched for him, she joins him; if she doesn’t want him, she sees that her own power doesn’t require him.

Woman as the Temptress

  • Hang on tight, because we’re getting a little Freudian, since the hero, having taken the mother-goddess as his own, formally assumes his father’s place.
  • Because of this, and because our understanding of the bliss of the world is incomplete, we sometimes respond with revulsion when the mother-goddess takes us.
  • In other words, as the hero transcends the earthly boundaries, the mother-goddess – as a symbol of the world he’s leaving behind – becomes disgusting. (We know, we know: sexist much?)
  • In this formula, the mother-goddess becomes death: a siren luring the hero to a grisly demise.
  • Example: St. Peter and his daughter Petronilla, followed by the writings of the Puritan thinker Cotton Mather.

Atonement with the Father

  • We continue with Puritan examples: Jonathan Edwards’ sermon about the wrath of God.
  • The father figure punishes the hero for presuming to take his place.
  • The hero is often protected by the mother-goddess in this ordeal, who gives him another center to focus on now that his connection to the father is severed.
  • The Navajo story of the Twin Warriors serves as an example for this point, followed by the Greek story of Phaethon.
  • The point of it all is that the father serves as the person who initiates the hero into the world, and if the initiation is imperfect, trouble ensues.
  • The father has two aspects too, just like the mother, but with a third side added: the father is now a rival.
  • The father passes on the power of the world… but only if the son (or daughter) is worthy.
  • And then we go really Freudian: another dream example, followed by a description of the rites the father figure puts the hero through.
  • The phallus replaces the breast as the end-all be-all and the rites serve to release the hero’s penis (power) from the confines of the father.
  • Examples form Aboriginal coming-of-age myths follow, then one about Zeus (the ultimate punishing father figure) and a number of additional myths.
  • The father figure represents the paradox of creation: he holds all the power yet denies it.
  • In order to claim it, the hero has to pierce himself through the core of his being – annihilating himself.
  • Why? He has to acknowledge that all the horrible things in the universe are part of the universe too… and need to be accepted instead of rejected.
  • Example? The story of Job, punished by God.
  • The punishment serves to further test the hero, who emerges with the acceptance of the father figure and is shown the bliss of the world.


  • Once the human hero gets past his fears and connections to the world, he is released, and the world becomes enlightenment, held in the hero’s hands.
  • The figure of enlightenment is both male and female, as a representation of everything in the universe.
  • The best aspects of both mother and father are kept, while the bad aspects are removed and cast aside.
  • More examples follow, pulled from Australian myths and biblical imagery.
  • Enlightenment means we break free of all our earthly prejudices and become one with God, and by extension, the universe.
  • Bet you’ll never guess what Campbell follows this with: examples. (This time, it’s the Bodhisattva myth from Asia.)
  • Bodhisattva links the myths with their psychological origins and the ways this enlightenment can be reflected in our own minds.
  • Psychoanalysis serves a similar purpose to the myth, resolving conflicts in the patients’ own mind to bring them peace and enlightenment.
  • The secret is that we don’t just find enlightenment. We are enlightenment!
  • Numerous examples from Eastern culture follow.

The Ultimate Boon

  • We return to the Prince of the Lonesome Island, and how easily he achieves his goal.
  • This signifies the delivery of the Ultimate Boon: the reward for the hero’s transcendence and wisdom.
  • The hero is destroyed and reborn as an indestructible being, possessing all the power in the universe.
  • The Ultimate Boon involves infinite abilities, infinite bliss and a party that just never ends.
  • Examples (we know, we know) include Olympus and the Christian notions of Heaven.
  • It’s a fairly immature fantasy, but Campbell also reminds us that those kinds of fantasy are very primal too: tied into our earliest emotions and no less powerful for their immaturity.
  • He cites the Hindu story of gods and titans battling for immortality.
  • Humor plays a role in transcending these fantasies: without humor, they become focused on baser issues like acquiring power and controlling people by promising them similar amounts of power.
  • By interacting with the gods and goddesses that grant him such power, the hero isn’t looking to steal their power from them, but rather to take on their grace.
  • The gods don’t always understand that, which means the hero must sometimes trick them into surrendering that grace.
  • The example du jour is the story of Maui in Polynesian culture, tricking the Guardian of Fire to surrender his power.
  • It’s followed by the story of Gilgamesh, who sought a source of immortality.
  • Immortality, Campbell stresses, is spiritual, not physical. (Aspiring vampires take note.)
  • Attempting to gain physical immortality or boons of a physical nature is bound to disappoint.
  • An example: King Midas, who wants everything he touches to turn to gold and ends up starving to death because he can’t eat.
  • Dante makes a similar realization at the end of The Divine Comedy as he gazes upon God, and Buddha’s victory beneath the Bo Tree.


Refusal of the Return

  • With the hero attaining everything he desires, you might think it’s time to roll the credits. But you’d be wrong.
  • The hero must return to the normal world and share his or her gifts with everyone.
  • Unfortunately, most heroes just say no to returning home.
  • Buddha, for instance, questioned whether his wisdom could be understood, while the Hindu leader Muchukunda slept in a hidden cavern rather than returning to the world.
  • In some cases, the hero is justified in this belief and is left in his bliss without having to return to the world.

The Magic Flight

  • Assuming the hero chooses to return to the world, he still has to get there.
  • If he’s stolen his boon or treasure, he’s going to be chased by all those cranky demons and gods he stole it from, resulting in a comic chase.
  • As an example, Campbell cites the Welsh story of Gwion Bach, who flees from angry giants by turning into various animals like rabbits and fish.
  • More examples follow: the first shaman, Morgon-Kara from Siberia, and a Maori folk tale about a fisherman who had a (literally) monstrous wife he had to flee from.
  • In some cases, obstacles are tossed in the hero’s way as he flies back, and the danger levels may still be high.
  • Campbell’s example in this case is the story of Jason, who must overcome a number of tasks once he seizes the Golden Fleece.
  • It’s followed by tales of the Japanese god-hero Izanagi and the Greek hero Orpheus, both of whom had to flee the underworld.
  • Orpheus is particularly important, since he looks back when he is told not to and loses his love, who he’d ventured into the underworld to find.
  • Human failure, not divine failure, is what causes troubles at this stage in the Hero’s Journey.
  • And yet the Hero’s Journey isn’t about failure but fulfillment. Better get some rescuing in there.

Rescue from Without

  • Sometimes the hero can’t return to the world on his own; he needs some help from someone else to do it.
  • The examples used include Raven, the helpful trickster of Native American legends, and Amaterasu, Japanese Goddess of the Sun.
  • The wisdom in this comes from the fact that we realize that all things are part of the divine…so that outside help is actually just another manifestation of the hero’s own immortality and power.
  • All of that eventually leads the hero back to his or her former home, armed with the gifts and wisdom won by all of his or her adventures.

The Crossing of the Return Threshold

  • There’s a division between the normal world the hero left and the supernatural world where he or she had his or her adventures.
  • Yet they’re actually all part of the same universe, and by exploring the unknown side, the hero unifies them in his or her own being.
  • The hero now has to express what he or she has learned to the normal world, a world that may not be ready to hear it.
  • This is a tough task, but it’s necessary because it advances the world and moves everyone forward spiritually, not just the hero.
  • Our example du jour is Rip Van Winkle, who lies in an enchanted sleep and then is mocked and persecuted when he returns home.
  • The Irish hero Oisin suffers a similar fate when he returns to the world.
  • Campbell points out that time is often dilated when the hero goes on his or her adventure: that one year in the supernatural world may equal a hundred in the normal world.
  • What the gods see as an eternal, unchanging world, mortals experience as swirling chaos.
  • The problem for the hero involves conveying that sense of eternal bliss to a world that cannot or will not see it.
  • In some stories, that can be achieved by an “insulating horse” which allows the hero to speak to the world without actually touching it.
  • Before that can happen, however, the hero has to survive the stress of returning to the world.
  • Examples include Arabian tales of the clashing jinns Dahnash and Maymunah.
  • Though the transition is difficult, it’s also inevitable: destiny will make sure it happens.

Master of the Two Worlds

  • The hero’s ultimate goal is to bridge the mortal and the divine; since he can move back and forth between them, he’s the one who can bring them together.
  • Campbell cites maybe the most obvious example in the entire book: Jesus Christ, who represents both the human and the divine in a single being.
  • The facts of a mythic story aren’t relevant: it doesn’t matter if it actually happened or not.
  • The truths these stories hold are the important thing: the way they can show us how to respond to conflicts and trials in our own lives.
  • Therefore, it’s not a single event, but something that resonates throughout all of time.
  • Campbell cites the Hindu “Song of the Lord” as an example.
  • Symbols, such as the kind found in the Hero’s Journey, are simply the means by which the message is communicated, not the message itself.
  • Symbols, therefore, can be fluid, and change to fit new times and new cultures, rather than staying bound in one place.
  • Individuals who surrender their fears, limitations, and failings – their individual needs – become vessels for spiritual and religious fulfillment.

Freedom to Live

  • The purpose of the Hero’s Journey, as a story, is to reconcile our individual needs with the “universal will” – in other words, to help us, as individuals, function more harmoniously with the universe.
  • We’re back to Gwion Bach for an example.
  • The hero represents the universe in a constant process of becoming: eternal yet ever-changing.

The Keys

  • Campbell starts the chapter with a diagram of the Hero’s Journey, summing up the previous 240-odd pages of text (cheat-sheet fans, take note).
  • He stresses that every tale is different, and that some emphasize specific steps in the Hero’s Journey more than others.
  • He returns to the Eskimo story of Raven as an example.
  • In cultural myths later in a given culture’s life, the important images can be more obscure and harder to find.
  • This is because older, simpler images no longer feel pertinent, and in many cases, the myths become swallowed up with less important details.
  • When this happens, life goes out of the mythology, and it becomes a relic.
  • When this happens, we can rejuvenate the myths by seeing the potency of stories in the past and applying that potency to a modern context.
  • Campbell cites the rite of baptism, which is a Christian/Catholic tradition but has roots in much older mythology.

Part II is called “The Cosmogonic Cycle.” Don’t worry, guys: we’ll explain.

From Psychology to Metaphysics

  • Psychologists, Campbell argues, understand that myths and fairy tales hold patterns that match our dreams….and by extension our internal thoughts and emotions.
  • Myths express our unconscious fears, desires and tensions, using symbolism to give those vague emotions a form we can latch on to.
  • The difference between myths and dreams is that myths can be given formal shape by our conscious thoughts, while dreams are vague and don’t always follow logical patterns.
  • They also represent specific spiritual principles, whether it be energy (in a purely rational context), mana, karma or simply the power of God.
  • They help awaken our minds and put us in a more spiritual state of being.

The Universal Round

  • The cycle of the universe—and of myths—matches that of night and day.
  • Existence is an endless cycle of awakening, living, sleeping (dying) as the light fades and rises again each dawn to do it all over again.
  • He cites examples from the Aztecs, and the myths of the Jains from India (who pictured time as a twelve-spoked wheel, which incidentally happens to be on the Indian flag).
  • The wheel is just another symbol, a way of showing us what Campbell calls the cosmogonic cycle.
  • In this cycle, our consciousness travels through three states of being: waking experience, dream experience, and dreamless (presumably blissful) sleep.
  • In the first stage, we encounter life lessons.
  • In the second stage, we absorb these lessons as we dream.
  • In the final stage, we enjoy it all and know everything.
  • We cycle through them all every day, and throughout our entire lives.
  • The Hindu culture expresses this through the chant “AUM”
  • A is waking life.
  • U is dream life.
  • M is deep sleep.
  • The silence surrounding the chant is the unknown: God, the cosmos, or some suitable stand-in.
  • Myth is a way of giving it all concrete shape, especially the silence.

Out of the Void – Space

  • Mythology, especially that involving creation, is also laced with destruction.
  • Myths carry a sense of doom, but are ultimately about fulfillment and life.
  • The meaning isn’t carried in the symbols, but rather in the person himself or herself.
  • Dramas present us with strange images that shock us out of our complacency, forcing us to look at the world differently.
  • Campbell then breaks down the stages of the cosmogonic cycle.
  • First, there’s the creation of form from formlessness.
  • He cites a creation myth from New Zealand as an example, as well as more examples from Hebrew, Indian and Chinese cultures.

Within Space – Life

  • The creation of the world provides space for the second stage of the cycle: the production of life.
  • For this task, the world is separated into male and female, and the process resembles physical birth.
  • Campbell goes back to the New Zealand creation myth to illustrate this.

The Breaking of the One into the Manifold

  • As life expands into the world, a crisis is created.
  • The world splits into two planes of existence: the sky and the underworld.
  • The first part of the cycle focuses on the Creator, or God; the second part focuses on humans, or the life within the Creation.
  • That involves a sudden transformation, from perfect to flawed.
  • This prevents the cosmic cycle from continuing, as the “children” (humans) seize and divide the power of the “parent” (god).
  • Examples abound, from the New Zealand story to the Greek myth of creation to the story of Marduk from Babylon.
  • But destroying the god-creator doesn’t really destroy it; just divides it up into little pieces.
  • Campbell observes that this is a paradox, like many in mythology: a beautiful act of creation made up of pain, destruction and division.
  • Myths serve to acknowledge the agony of that process, while reminding us of the peace and harmony that surrounds it.
  • Again, the crucifixion of Jesus makes a great example: beauty and harmony is achieved through unbelievable suffering.

Folk Stories of Creation

  • Simple folk stories are much more straightforward than the cosmogonic cycle: they don’t seek to understand the meaning of it, they just observe.
  • Creation myths are usually the same: a shadow creator gives the world a form slowly, then deals with the creation of man and the finality of death.
  • Campbell notes that many of these myths are playful, and their simplicity suggests that people didn’t actually believe them as literal truth.
  • He points out the presences of clown figures in creation myths, who create troubles and difficulties in the newly formed world.
  • Again with the examples, this time from New Britain and Siberia. (We might also point out the Christian serpent in the Garden of Eden as a good example.)
  • Nevertheless, folk stories contain the same spiritual truths as the more elaborate or textured myths.

The Virgin Birth

Mother Universe

  • The father’s spirit creates the world by passing his energy through a transforming figure: the mother of the universe.
  • The mother is represented in Christian text as the “waters” that God moves over in Genesis, while Hindu myths also speak of a mother figure who constitutes all space and time.
  • Some cultures do away with the father figure completely and leave the mother universe as the creator.
  • Campbell cites the Finnish tale of Kalevala as an example.

Matrix of Destiny

  • The mother of creation will often appear to human beings in various disguises in these stories, comprising birth and death, depending upon the specific form.
  • Campbell returns to the New Zealand creation myth.
  • The three stages of the cosmic cycle are on full display: waking life, dream life and dreamless bliss.
  • The parental figures who create the universe vanish into the void, leaving humanity alone on the earth to move the cycle into another phase.

Womb of Redemption

  • With humanity left on its own, life becomes a struggle: mistakes are made, ego and arrogance cause difficulties, and creation suffers.
  • The people need someone to redeem them and end that suffering: someone who takes on the form and function of the divine.
  • Having reached the bottom of the cycle, it’s time to move on up: enter the hero.
  • The example, again, comes from Christianity: the virgin birth that will save us all.
  • Other examples stem from South American stories and the Hindu tale of Shiva.

Folk Stories of Virgin Motherhood

  • Stories of virgin births aren’t limited to Christianity, as evinced by a folk story from Tonga.

Transformations of the Hero

The Primordial Hero and the Human

  • We now see two stages of this: the creation of the world by the divine and the passage of history via humanity.
  • The second half of that, the one we’re all used to, is where the hero arises: claiming the divine power of the gods in the form of a mere mortal.
  • That marks a slow movement away from myth and towards fact: the divine recedes, details move from myth to legend and then to history until finally we’re left with the mundane details of recorded time.
  • Example: Mwuetsi the Moon Man, and the story of various Chinese Emperors.

Childhood of the Human Hero

  • Many myths show the entire life of the hero as extraordinary, not just his Journey to solve a specific ill.
  • This suggests that the hero is either a normal man who attains wisdom, or a figure of destiny, chosen by the gods to serve as a hero.
  • The first part of the book, “The Adventure of the Hero” details the first notion (a normal man who attains heroic stature on his own).
  • The second notion – that of the hero as an extension of divine will – is now explored.
  • As a figure of destiny, the hero must experience the three stages of the cosmogonic cycle consciously – understanding them all – then bring that wisdom back for the world to share.
  • This extends to real-life figures who are the subject of legend: tales will be made about their deeds that have a fantastic quality to them (think of George Washington and the cherry tree).
  • Campbell cites King Sargon of Agada, Pope Gregory and Charlemagne as examples of real-life people who get this treatment.
  • The Biblical figure of Abraham is discussed at length, as is a native American figure named Kut-o-yis.
  • The child-hero will live in obscurity for many years, which means he faces danger, or at least being held back from his potential for a while.
  • He may gain benefits during this time, too, from a helpful companion or guide.
  • You need to have something special to survive such an experience: the myths show this with stories of amazing strength, intelligence and insight at an early age.
  • The big example of this is Hercules strangling the serpents sent to kill him in his crib, but Campbell goes on to cite the Hindu god Krishna too.
  • The childhood cycle for the hero ends when the hero ends this period of obscurity and becomes known.
  • Sometimes, his “coming out” will create a crisis that needs to be resolved.
  • The world will be remade after the crisis in a new form, such as after the Crucifixion, or the Pueblo story of the water jar.

The Hero as Warrior

  • The hero’s birthplace, or the place where he grew up, is the navel of the world.
  • Campbell talks about a hero myth from Siberia to prove his point.
  • The hero eventually leaves this spot to fulfill his destiny.
  • Victory comes not over a threat or a danger so much as the status quo: the monster he or she slays represents The Way Things Are.
  • The monster holds onto his power and does not want to change.
  • But he’s also proud, since he thinks his power belongs to him instead of the universe.
  • The hero knows the monster’s weakness and destroys the monster easily.
  • In the process, he frees the world to move with fluidity instead of being stuck.
  • He then needs to clear the world of all lingering monsters, who usually reside in caves or the wilderness, away from civilization.
  • Campbell returns to Kut-o-yis as an example of this tendency.
  • He also cites Hercules, Theseus, and Jack the Giant Killer as other examples, as well as the French story of St. Martha.

The Hero as Lover

  • With the monsters dead and rigidity destroyed, the hero can then take a wife.
  • She is his mirror, his other half, and can often see his destiny.
  • He must usually overcome a specific obstacle or set of obstacles to get her.
  • Our example for this one is Cuchulainn, a hero from Ireland.

The Hero as Emperor and Tyrant

  • The hero is an agent of the cycle, and works to continue, um, cycling it.
  • In some cases, the hero exists to reestablish the world’s connection to God: you usually see that in religious contexts.
  • Campbell returns to the story of the Pueblo hero, Water Jar boy.
  • If the hero is blessed by the father, he takes the father’s place as a ruler.
  • He reflects the balance and the axis of the world as a king.
  • Sometimes, however, the hero falls back into a purely human state, which turns him from wise king to despotic tyrant.
  • The Persian legend of Jemshid illustrates this point.
  • He no longer carries the balanced wisdom of the normal and supernatural worlds.
  • He is now a tyrant, and it’s up to another hero to usurp him.

The Hero as World Redeemer

  • If the hero rules in the place of a symbolic father, then two rites of initiation must take place.
  • The first is the son serving as emissary to the father.
  • The second leads to his understanding that he and the father are one.
  • Heroes of this second type are the highest sort: the world redeemers, the ones whose authority becomes divine.
  • The example for this is the Apache hero Jicarilla.
  • The hero can still perform heroic deeds, but they’re done with the understanding that they could be accomplished instantly by the power of the divine which he contains.
  • The example involves Krishna and his cruel uncle in Hindu mythology.
  • There is often a period of desolation here, caused by the hero’s remaining human faults.
  • The redeeming god-hero thus becomes the destroying god-hero, perpetuating the cycle and confirming that the god’s power is to both create and destroy the world.
  • In this sense, the hero-as-tyrant is still representative of the symbolic father, just as the hero-as-just-ruler-is. After all, evil is as much a part of the universe as good.
  • Campbell stresses that these are just two different ways of telling the same story: the son assuming the place of his father.
  • The hero will become the tyrant, unless he crucifies himself: dying only to be reborn.
  • As the son takes the father’s place, the many become one again… and the cycle continues.

The Hero as Saint

  • The saint, as you may expect, is a hero devoid of any real flaws.
  • The saint-hero eliminates any and all shreds of self-interest and embraces the wholeness of the universe.
  • The example is, as you may have suspected, an actual saint: Thomas Aquinas.
  • They essentially don’t return form their journey, moving beyond the mortal realm and existing only in secondhand form like legends.

The Departure of the Hero

  • Every hero’s story has to end, either with death or a departure of some sort.
  • Examples include Death coming to Abraham and another anonymous dream.
  • In many cases, the hero doesn’t actually die, but actually just sleeps and will arise again when he or she is needed.
  • Campbell’s examples? Charlemagne and the Aztec serpent Quetzalcoatl.
  • Some heroes can postpone death and attempt to remain in the mortal realm, as the Irish hero Cuchulainn and the Pueblo’s Water Boy do.


The End of the Microcosm

  • Each and every one of us is the hero. There, Campbell said it.
  • We all have a king or queen within us: the greatest that we can be spiritually, and not just physically.
  • In death, the individual is taken into the universe and becomes one with it.
  • The journey of the soul through all stages of life is the same as the Hero’s Journey: the final journey is the one we all take at the end of our lives.
  • Copious examples from China, Egypt and the Aztecs follow.

The End of the Macrocosm

  • The universe follows the same cycle as the individual: being born, living, thriving, declining and perishing.
  • End-of-the-world stories from Mayan culture illustrate this trend, as do the Viking story of Ragnarok and the Christian notion of Armageddon.

Myth and Society

The Shapeshifter

  • There’s no end-all-be-all way to interpret mythology, so Campbell wants us to know that our mileage may vary.
  • He talks about the myth of Proteus, where grasping the thing you want to understand is impossible.
  • Modern society interprets myth in a huge number of says, applying it to religion, metaphysics, psychology, natural studies and others.

The Function of Myth, Cult and Meditation

  • Individuals are limited by who they are; they’re only one small part of humanity.
  • The totality of man exists only in society, not in the individual.
  • Rituals of birth, death, weddings and similar events help connect us to this larger whole, making us a part of a larger community.
  • Being cut off from that sense of community can be painful.
  • Rites and rituals for death, the changing of the seasons and so forth, are an acknowledgment of the new phase in life and should be celebrated, as they were in ancient cultures.
  • There’s another option: to separate yourself from the world like a monk and contemplate the universal human being within.
  • The goal is not to see, but to understand.
  • That eliminates any sense of self… as all becomes one.

The Hero Today

  • That’s all a far cry from our democratic culture, which values the power of the individual.
  • We focus on the secular and have no more time for gods or legends.
  • In the past, people found meaning with their group; now, we focus on the individual.
  • Stories of heroes need to come from the contemporary age and reflect our unique perspective and sensibilities.
  • We can’t do this with simple consciousness, which we use to solve our problems; we need to reconnect with the dream state.
  • The mysteries of the ancient world no longer exist: there’s no more to explore.
  • As individuals in modern society, we must become the hero to save society, instead of the reverse… and we must do so in the utter despair of loneliness.



50 Words to Your Dreams Chapter 28 Energy by Michael George Knight

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The energy I want to discuss is your life force energy which makes you alive and human. This force of energy that dwells within you and emanates through your body is what allows you to live. It is this energy that gives us strength and vitality required for sustained physical and mental activity. Some people have an abundance of energy and some people have a lack of energy. Kids generally have an abundance of natural energy in their early stages and life vs the elderly who generally have a lack of energy. Then there is everyone else in the middle who generally can control the amount of energy they possess if they desire so. You have the power to increase your natural energy levels if you desire the strength and vitality in your life.


You can increase your energy not only by getting enough sleep and eating healthy but by activating your body into gear. To take your energy up another notch take action and get your body moving. Go for a walk, a run, a ride, a swim or a workout. Get your body in shape by putting your body under some stress. Your body will react to the stress by getting fitter and stronger and produce more energy. You will feel better throughout the day both mentality and physically. Activate your muscles and get your blood pumping. Walk faster than normal, have a spring in your step, clap your hands, whistle, sing, listen to music and pump yourself up to perform at your best.



Apart from the physical energy we discussed which we all need for high productivity, mental energy is other major component you need to work on. Having high levels of mental energy include happiness, confidence, focus, and increased willpower, motivation, and productivity. You can develop your mental energy in a number of different ways from being present and grateful, surrounding yourself with great people, thinking positively, decluttering your mind, going outside and having fun, meditating, getting enough rest, drinking caffeine and trying new things. Work on yourself to expand your mental and physical energy to live, thrive and create the life you want. Without the right amount of energy you will struggle to achieve your dreams, as energy is the force that drives your success in life.



  • A person’s energy can tell you more about them than their own words. (Unknown)
  • All things are vibrating energy fields in ceaseless motion. (Eckhart Tolle)
  • By supplying attitudes of faith to the mind it can increase energy. (Norman Vincent Peale)
  • Don’t hold to anger, hurt, or pain. They steal your energy and keep you from love. (Leo Buscaglia)
  • Energy flows where attention goes. (Michael Beckwith)
  • Energy is the currency of the universe. When you ‘pay’ attention to something, you buy that experience. So when you allow your consciousness to focus on someone or something that annoys you, you feed it your energy, and it reciprocates the experience of being annoyed. Be selective in your focus because your attention feed the energy of it and keeps it alive. Not just within you, but in the collective consciousness as well. (Emily Maroutian)
  • Energy, not time, is the fundamental currency of high performance. (Jim Loehr)
  • Every human being emanates an energy field that corresponds to his or her inner state, and most people can sense it. (Eckhart Tolle)
  • Everything around us is made up of energy. To attract positive things in your life, start by giving off positive energy. (Celestine Chua)
  • Everything changes when you start to emit your own frequencies rather than absorbing the frequencies around you, when you start imprinting your intent on the universe rather than receiving an imprint from existence. (Barbara Marciniak)
  • Goals help you channel your energy into action. (Les Brown)
  • Just as a highly magnetized piece of metal can lift another piece ten times its size, so a highly magnetized person, charged with confidence and purpose, can do at least ten times more than another who is not so energized. (Orison Swett Marden)
  • Live with Intensity. You might as well turn it up a notch or two. Invest more of you in whatever you do. Be a little stronger; be a little wiser. Step up your vitality contribution. Put everything you’ve got into everything you do and then ask for more vitality, more strength and more vigor, more heart and more soul. (Jim Rohn)
  • Maximize your personal powers: Identify your periods of highest mental and physical energy each day and structure your most important and demanding tasks around these times. Get lots of rest so you can perform at your best. (Brian Tracy)
  • Nothing can add more power to your life than concentrating all of your energies on a limited set of targets. (Nido Qubein)
  • One of the most important requirements for being happy and productive is for you to guard and nurture your energy levels at all times. (Brian Tracy)
  • People who are very clear on who they are and their mission in life tend to be bursting with energy, yet they are also aware of the need for times of quiet and reflection to renew themselves. (Tony Schwartz)
  • Power is predicated upon organized energy. Energy can only be organized through the principle of concentration. It is a fact worthy of serious consideration that all men of outstanding success in all walks of life are men who concentrate the major portion of their thoughts and efforts upon some definite purpose or chief aim. (Napoleon Hill)
  • Success, my nomination for the single most important ingredient is energy well directed. (Louis Lundborg)
  • The average person puts only 25% of his energy and ability into his work. The world takes off its hat to those who put in more than 50% of their capacity, and stands on its head for those few and far between souls who devote 100%. (Andrew Carnegie)
  • The first law of success is concentration to bend all the energies to one point, and to go directly to that point, looking neither to the right or to the left. (William Mathews)
  • The higher your energy level, the more efficient your body. The more efficient your body, the better you feel and the more you will use your talent to produce outstanding results. (Anthony Robbins)
  • The key that unlocks energy is desire. It’s also the key to a long and interesting life. If we expect to create any drive, any real force within ourselves, we have to get excited. (Earl Nightingale)
  • The longer I live, the more I am certain that the great difference between men, between the feeble and the powerful, between the great and the insignificant, is energy invincible determination a purpose once fixed, and then death or victory. (Sir Thomas Fowell Buxton)
  • The number of hours in a day is fixed, but the quantity and quality of energy available to us is not. It is our most precious resource. The more we take responsibility for the energy we bring to the world, the more empowered and productive we become. The more we blame others or external circumstances, the more negative and compromised our energy is likely to be. (Jim Loehr)
  • The source of all energy is within you. (Eckhart Tolle)
  • There are four kinds of personal energy: Mental, Emotional, Spiritual and Physical. (Tom Hopkins)
  • When you are fully rested, you can get two times, three times and five times as much done as when you are tired out. (Brian Tracy)
  • When you become an action-oriented person, you activate the ‘Momentum Principle’ of success. This principle says that although it may take tremendous amounts of energy to overcome inertia and get going initially, it then takes far less energy to keep going. (Brian Tracy)
  • When your energy level is low, your health and your desirable characteristics may by subdued by the negative. You, like a storage battery, are dead when your energy level is zero. What is the solution? Recharge your battery? How? Relax, play, rest and sleep. (W. Clement Stone)
  • Without passion you don’t have energy, without energy you have nothing. (Donald (Trump)
  • Your mental energy is limited by your physical energy. How do you develop more energy of all kinds? You start by putting your body in top physical condition. Unless you do that, all your other activities won’t help much, you’ll be stuck with the mental and emotional energy that you have now. (Tom Hopkins)


That’s a wrap on

50 Words to Your Dreams

Chapter 28: Energy

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