Kurt Nelson  0:07  
Welcome to behavioral grooves, the podcast that explores our human condition. I'm Kurt Nelson

Tim Houlihan  0:12  
and I'm Tim Houlihan. We talk with researchers and other interesting people to better understand why we why we do what we do, and we do it by using a behavioral science lens. In

Kurt Nelson  0:23  
this episode, we spoke with Mark Mattson. He is the author of several books, and his most recent one that we talked to him about is called experiencing the American dream. Now, Mark has some reservations about how people in the United States think about what has been referred to as the American dream, and we'll get into that in the conversation that we have with him, but we took a look back on this, and we did some research on our own. And from what we can tell, the idea of the American dream was first written about in 1931 by a historian named James truel Adams. And James wrote that the American Dream is quote, that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. End Quote,

Tim Houlihan  1:12  
although he coined the term American dream in his 1931 book, The Epic of America, Adams really wasn't bringing up a new idea. The concept itself had actually been around long before Adams wrote about it. You can see, actually, you can see inferences of liberty and upward mobility and writings from the founding fathers of our country. And then it was amplified in the rags to riches stories that were popularized around the late 19th century. So by 1931 everybody kind of already

Kurt Nelson  1:41  
agreed, yeah. And so here's the deal. We like the American dream. We like the idea that life should be better and richer and fuller for everyone, and we like the way that Mark frames wealth, which is not as an objective, but as a means to a better life. However we we also think that some of Mark's views of the American dream, those ideas of it being truly open and achievable by everyone, if they just work hard, doesn't necessarily take into account some of the realities in America today.

Tim Houlihan  2:20  
Yeah, so we were conscious of inviting mark on to be our guest. We wanted to discuss his book and get his get his thoughts and to hear about his thesis. We also thought long and hard about how we'd approach his comments in publishing this episode. So here we are.

Kurt Nelson  2:38  
We struggled with this. I mean, we had multiple conversations Tim about how we were going to handle this, and not necessarily because we don't agree with everything Mark says we agree with a lot of what he says, but there are some things that simplify. There's a there's a part of this that doesn't necessarily capture all of the reality. And so we thought, well, do we, do we publish it? Do we not publish it? Do we edit it? Or do we just kind of do what we're doing now, which is kind of, we'll set it up and we'll talk about it. And I think that the key thing here is that there are some assumptions made, I think, in Mark or things left out and that aren't necessarily supported by all of the evidence. We've had researchers on dolly chug and Robert Livingston, who talk about the difficulties, some of the systemic components within the United States that don't forclude Somebody from having the American dream or achieving it, but makes it a lot harder the headwinds, as dolly Chu talks about. So yeah,

Tim Houlihan  3:50  
yeah, yeah. And Kurt, I just want to double down on what you said, like we're science communicators, and so we're interested in presenting ideas that are evidence based and there are. So there were some challenges when it came to like, how can we go through all of Mark's conversation and find evidence for all of them? Want to let people know, you mentioned this earlier, but we are presenting our conversation with Mark completely unedited. It's presented in its entirety for you to take in and listen to as you see,

Kurt Nelson  4:24  
yeah. And so again, as we said, there's lots of things that we agree with him on, and there's many that we have a little bit of an issue. But we'll let you listen and come to your own conclusion. That's what we do here on behavioral grooves. And we'll talk about this. We'll talk about it a lot more in the grooving session. So if you're interested, stay tuned for that and hear Tim and me chat about it. But for now, grooves, we encourage you to sit back and relax with a big cup of whatever type of American dream you have and enjoy our conversation with Mark. Mattson.

Tim Houlihan  5:08  
Mark. Mattson, welcome to behavioral grooves. Thanks, Tim. It's great to be with you. It's great to have you here. Thanks for joining us. And we're going to get started with some kind of silly Speed Round questions. And first, we want to know, would you rather learn a new instrument or a new language.

Mark Matson  5:23  
Oh, a new language. There's no doubt I tried, I've tried piano and various instruments, just giving up on the instrument. Yes, I'm totally I've come to believe that music is ingrained talent that has to be developed. And I'm really clear. I have none of it.

Kurt Nelson  5:46  
Oh man, well, there you go.

Mark Matson  5:49  
I like to sing, though. So there's an instrument.

Kurt Nelson  5:54  
Their voice is an instrument. There you go. All right, so have to ask, What language is it that you would like to is there a specific language that you would like to learn?

Mark Matson  6:04  
And I think I would like Italian. I really love Italy. The times we've been visited Italy were just absolutely delightful. And so I think if I was going to take up a language, I'd go with that. We have a lot of Spanish going on in Arizona. So that would come in handy. And I do love going to Cabo. So Spanish would be a close second. If

Tim Houlihan  6:28  
you're in Italy, you could say more than just spaghetti, you

Unknown Speaker  6:31  
know, or lasagna.

Kurt Nelson  6:36  
There's something about people swearing in in Italian too. There's, there's, like, more, I don't know, I want to learn some swear words. And

Mark Matson  6:45  
I love the, I love mob movies. There's always a lot of Italian going on in the mic.

Kurt Nelson  6:51  
And they use that gestures. And you got, you got all of that. I think that would be, yeah,

Mark Matson  6:56  
I think measurements,

Kurt Nelson  7:02  
huh? Absolutely. All right, our speed round, ours never speedy, as I say every single time. So I'm sure our listeners are tired of that. All right, here's, here's an easy question, are you a tea drinker or a coffee drinker? Neither.

Mark Matson  7:17  
Neither. I am a strong believer in energy drinks. Unfortunately, I drink monster, which my wife tries to get me off of all the time. She tells me how terrible it is.

Speaker 1  7:32  
She's probably right, and you're not, you're not heating the call.

Mark Matson  7:35  
No, I just, I never took up coffee, ever. I when I did try it, I thought tasted like mud in a cup. And I was like, that's not me. I'm not doing it. So we're

Tim Houlihan  7:46  
on the minority. We're no, we're on that when we're on the same team,

Kurt Nelson  7:50  
I'm not. I'm a coffee drinker, Tim, and you are on the same team there I will, I will say,

Tim Houlihan  7:55  
like, there are some things that as a child, I wanted to develop a taste for coffee. Was just like, why would I want to develop a taste for this?

Mark Matson  8:05  
It never got me either. Yeah, okay,

Kurt Nelson  8:07  
because it smells good and there's caffeine, and it's wonderful, and caffeine, I'm not gonna try to convert any of the non coffee drinkers here. So you guys. Okay, so

Tim Houlihan  8:17  
caffeine, good. Do you like the smell of coffee? No, I like the smell of coffee, but anyway, okay, speed round. Okay. Third question, true or false, the strategy of timing the market is maybe the most brilliant strategy ever created.

Mark Matson  8:37  
Yeah, absolutely false. Good. That was not even debatable. Anyone that's read the literature or studied any of the finest look markets are random and unpredictable, because all the knowable information is already priced into prices today, therefore only random and unpredictable information will change prices moving forward. So timing the market is absolutely a fool's errand. It's one of the main things I wrote about in the book, and it's a, it's a very disastrous thing for most investors. We're coming

Unknown Speaker  9:09  
back to that, yeah, yeah.

Kurt Nelson  9:11  
Well, we'll, we'll talk about that. So our last of the not so speedy speed around questions here. All right, so, So Mark, is it true that understanding your own cognitive biases can have a positive impact on your investing results? It is true

Mark Matson  9:29  
with the caveat that even understanding it make it doesn't give you complete agency over controlling it. It's like knowing the rules of a diet. You know, you know, you know, you know, eat less and move more and you lose weight the so the knowledge of it is one thing, the application of it is completely different. And often the knowledge does not ensure the actual actions that back it up. So it gives you a little bit of help. But. I would take that with a grain of salt

Tim Houlihan  10:03  
as knowledge in and of itself. Yeah, because it's because it's not enough,

Mark Matson  10:07  
you know, because the vast majority David Eagleman, Stanford University neurologist, brain scientist. He's on our academic board, and like he likes to say, 95% of almost everything you do subconscious 5% of it's you know, justified by your cognitive mind, the part that you can access that tells you, gives you the excuse for why you why you did it. But the subconscious mind is vast and a mystery. Yeah?

Kurt Nelson  10:37  
Actually, Lori Santos calls us the GI Joe effect, right? This idea that knowledge, in and of itself, of a bias isn't enough to actually you know, get you to understand or be changed by it, right? You can know it, but it doesn't really impact the application. As you said, in most cases, our biases are so at such an unconscious level that it is very hard for us to actually even impact them. But I love this idea of at least being understanding like we need to understand those biases, and then we can hopefully apply or put some things in place, understanding those that are going to help our investing as we share. So

Unknown Speaker  11:20  
yeah, that's very accurate, yeah, for

Tim Houlihan  11:22  
sure. Okay, we are talking with Mark about his new book, experiencing the American dream. And I think we should start by, let's just talk about what, what the American dream is. We were talking before we we went on, on record here about the presence of the American dream. But Mark, how do we define the American dream in 2025

Mark Matson  11:41  
Yeah, I think there's a common view of an American Dream that is very simple. It's, you know, home ownership, white picket fence, 2.2 children, you know, a nice job. Retire at 65 have the 401, K. It's kind of like just standard stuff most people would think is part of, you know, the American dream. My dad taught me. I was really lucky, because he really built this into me from a very young age, that the American dream is not materialism. It's not what you own, it's not how much wealth you have. It's a view of the world. It's like a screen, a terministic screen that allows you to see the world in a way that empowers you to take take actions that you wouldn't normally take if you didn't have that screen. So I grew up my where I grew up, in West Virginia. My grandpa and my dad had a very contentious relationship, and my grandpa believed that the American dream was evil. He believed it was based on greed. He was very he we was a victim his whole life. Of course, it's easy to understand. He grew up working in the coal mines from the age of like 15, then he worked in the chemical factories there in Charleston, West Virginia. But he just loathed the American dream, and he thought American Dream, the capitalism and free markets, the foundation of the American dream, were evil themselves. And my dad taught me that the American Dream is based on freedom. It's based on creativity. It's based on service to other people. Nobody owes you shit. That's his language, and that the only way that you you are entitled to wealth or prosperity is if you create wealth and prosperity for other people first. And so it's the being an entrepreneur, having your own podcast, going out there and creating value for the world. These are all aspects of the American dream. And we have tremendous freedom in this country that the vast majority of countries do not have. I mean, in our founding documents, it says, you know, the right to pursue happiness for goodness sakes. I mean, where else does it say in founding documents? Anywhere? Guarantee it's not Iran, Russia or Venezuela.

Tim Houlihan  13:56  
So it, in some ways, what you're talking about is a little bit more nuanced, a little bit more complex than that old style, 1930s version. Is that, is that a fair statement?

Mark Matson  14:08  
Yeah, for sure. I mean, inside of the American Dream, the idea that the next generation can have more wealth, prosperity and higher quality of life, that's definitely part of it. Even within one with, within one generation, you can be born into poverty like I was, and then you can escape. But it's a way of seeing the world. I can see myself as a victim. I can see myself as entitled. I can see myself as well as me, and why can't I get mine? Or I can see the world of America as based on freedom and creativity and ownership of property, being able to create my own business. And so I see it, and without that, my business wouldn't be possible. I have $7.6 billion under management. I have 35,000 families all over the United States. One. We have made my investor, $6 billion over the last 34 years. None of that would have been possible if I had had a victimhood mentality that had been driven into me at a young age. Instead, I had a you need to go out and work out. The other thing that was part of the American dream that my dad taught me, you know, with snow in Cincinnati and all the other kids you know would be off school. They'd go get their sleds and go sledding. And my dad would be like, No, you go get the snow shovel and you go walk door to door to all our neighbors and ask them if you can shovel their walk in their driveway. And I'm like, How much should I ask them for? I said, he said, don't ask them for anything. If they have money, they'll give it to you, you know, if maybe they'll give you a cookie or hot chocolate. But he said, Work is its own value. Work for work's sake, it creates your character, it creates your vision. And I think that's something that a lot of Americans have lost. You know, it's not look we have unemployment, but it's not because we don't have jobs. It's because we have jobs available, but we have 9 million people that won't take the jobs. So work ethic is also part of the foundation of the American dream, something I think that needs to be revived.

Kurt Nelson  16:07  
I was going to ask you talk about this idea. And you talked about how you were raised and brought up with this idea. And then you said, there are others that don't, and like your grandfather, who had a very different worldview, very different perception on this. So if, if you know people are maybe haven't had the same upbringing as you, maybe have a different perspective on things. What? What is your message to them? I mean, is there a message is because it's not. Again, we know from behavior change, right? By telling them, oh, this is the way that it should be that doesn't change their attitudes, their beliefs, their behaviors, various different pieces. So what is that message? How do you get to those people that may not have the same perspective that you do?

Mark Matson  16:55  
Well, I think that's why podcasts like this are so valuable. And at, at the risk of sounding self serving, you could buy the book, yeah,

Kurt Nelson  17:06  
there you go.

Mark Matson  17:07  
This is not, yeah. This is not I want. What I want to convey to you. This is not unique to people that are in poverty or trying to get out of poverty. Anybody can have an entitlement mentality and a victimhood mentality. Yeah, I went through a period of my life where I had osteonecrosis, and my my hips were, I was I was only 30 years old, but my hips were disintegrating from prednisone, from asthma, and I was really panicked. And what went kept going through my mind is, why me? Why me? Why me? Why am I going to suffer through this paint, and I went to a doctor's office, and when I went into the office, there were a bunch of children. He was a blood specialist, and there were 10 children taking IV, IVs for cancer. And I'm sitting there in the waiting room, and I'm like, You selfish, arrogant, entitled jerk, like, Who are you to think that you get to live a charmed life, without pain, without suffering, without adversity, and who do you think you are that you get a free ride? And I was thinking, you're acting entitled. You're acting like a victim. You're be Woe is me. How terrible my life is. And in one second, I went from why me to why not me. I'm not special. I'm not you know. I shouldn't have get a free ride, you know. And then shortly after that, I went and got my hips. I had him replaced both my hips. Replace it in my when I was 32 and but it's easy to fall into that victimhood mentality, whether it's, you know, going through divorce, or whether it's losing a job, or whether it's the market's down 50% or whether it's you know, all maybe you are an entrepreneur and you're you lose your job, your business goes under. There's all kinds of, you know, human beings deal with many things that create suffering and pain, and no one's immune. But what I knew, I do know, is that as an adult, the screen of your life as a victim and the screen of your life as entitled to something you didn't earn will destroy and eat away at the foundation of anything you could ever create that would make your life better in the lives of others. So the way you the way you deal with that is you look at the negative destruction of the belief and see that it's not true. It's just something you made up. Somewhere along the way, you made up something about either I'm not good enough, I'm not handsome enough, I'm not pretty enough, I'm not smart enough, I'm not something, and then I'm entitled to something, and I'm a victim, and it stuck. But you want to see to get rid of it, you want to see the destruction. Yeah. So when I was little, I had trouble in spelling, I had trouble with reading, and, you know, I made up in my mind, you're stupid and you're not good enough, and all this stuff. And then in later life, I got to see, well, with that screen in place, you're never going to you're never going to go to college, you're never going to succeed, you're never going to your own, your own business, you're never going to grow, you're never going to help people. And so you have to see the cost of the the other screen and then, and then drive a truck through it and be willing to give it up. And is it easy? No, it is not easy. So changing, changing screens are one of the hardest things you'll ever do

Tim Houlihan  20:35  
so in your life, was there. I'm just curious, because we talk about inflection points, like, there's particular points, because there's a lot of, as you said, there's a lot of layers in these screens. It's not like it's just one, there's lots, right? Yes, so were there some particular inflections points in your own life where you were, like, wait a minute, it, it doesn't I don't have to look at myself as being stupid because I'm having a hard time reading right?

Mark Matson  21:03  
Well, the biggest one for me, the biggest one of the biggest screens I grew up with. We did not grow up as a very religious family. As a matter of fact, we grew up as atheists and and I took that on. I ran with it. And when went to college and took, you know, classes at Miami University on problems with God and religion, and, you know, Freud and Buber and different, different psychiatrists and philosophers well, and

Tim Houlihan  21:28  
just curious, it was that come down from your grandfather, through your through your mom,

Mark Matson  21:31  
and it came from my dad for sure. Oh, okay, I'm not really sure how my grandfather viewed that whole thing. But I came down from that, and then I built on it, though, I mean, I ran with it, and then, and so for me, it was a screen that said, No, God. And then when I went through my in my early 30s, I went through divorce and all the self reliance, all of the me trying to call all the shots, me trying to run my own life without God. It started to come apart. And I had a buddy of mine that used to say, you're a Christian. I would say, Stop saying that. I'm an atheist. Don't, don't say that. He kept saying it. He kept saying he said, I know your heart, you're a Christian. I said, No, I'm not stop it. And so, so then I go through my divorce, and I'm in this hotel room, and I'm I call my buddy, and you know, I'm looking around and I'm crying. And he said, Well, look around at those four walls. I said, Yeah. He said, That's you trying to run your own life. And he said, Are you ready to pray the first honest prayer you've ever prayed? And I said, Yeah, I'm ready. And I hit my knees and I prayed with him. I didn't know how to do it, so he did most of the praying, but in literally, in a second, I went from no god to God, and then that changed everything in my life, how I view myself, how I view relationships, how I viewed being a father, how I viewed being an entrepreneur. And it was a very lonely, desolate, suffering world of being. And I drove my literally drove my life into a brick wall. Versus having a God and having higher, higher power, it made all the difference. So I can't, you know, I'm not not recruiting here. I'm just saying that screens can be amazingly powerful, and they they exist in relationships and finance and in parenting and being an entrepreneur. There's, as you said, Tim, there are literally millions of screens. And when you put those screens together, they form a worldview that feels like reality to the one that has them. But the vast majority of this is made up stories and screens without any scientific fact to back it up at all.

Kurt Nelson  23:58  
Mark you write in the book, you say most investors become their worst enemy, and I'm assuming part of that is the screens that they hold on there. Why do you think the self sabotage is so common? It's common across the world, but in finance, where you go, that should be more of a rational we should be more rational in that it shouldn't be an emotional response, but that's not how it works. Is that correct?

Mark Matson  24:26  
Should we? Yeah, we should be like Spock or data from Star Trek.

Kurt Nelson  24:30  
You would think so. It's money I got. Here's an investment. Here's how this works. I should be able to look at this. Compare that. Boom, done. But that's

Mark Matson  24:40  
no it's not how it works. It would be so great. It would be so great if it did. There's three things that get investors and they are their worst their own worst enemy, followed up only secondly by most financial advisors who. Also their own worst enemy. They're not any better than the vast majority. Are not any better than the clients themselves. So there's, there's three things that have that affect them. There's one the instincts. The instincts always push you in the wrong way. Instincts Have you run away from things that are painful. And if you grab your statement and you see your stocks are down 30% I know people can't remember it anymore, but 2008 stocks were down 50 33% for that year, 50% in total, when you went through covid, they were down 30% in one quarter. When you go through 2002 1000 tech stocks were down 75% so people run, they don't view it as running. You we mentioned market timing earlier. That's market timing. They run when things are bad, because because of their instincts, and then they have confirmation bias. They turn on TV, and when they get afraid and they want to sell now they see a talking head saying, it's going to be terrible. It's going to be worse. You better get out now. Jimmy Kramer or Tony Robbins or whoever, saying you got to get out. This is the time to get out. You're going to lose another half. And they pull the trigger, and they time, and they sell. So it's the instincts, they're afraid, so that's emotions, and then they're using biases. If you look at the history of investing, depending how long you think human beings have been on the planet, but the history of investing is only three 400 years old. So that is, it's a very there in 5000 years ago, in a in a cave in Normandy France. There are no pie charts and standard deviations. So this is a new thing for human beings, and I don't think our brains have caught up yet.

Tim Houlihan  26:48  
Now that you call attention to it, I don't remember any I don't remember seeing any pie charts or standard deviations. Well, you're bringing up behavioral economics and neuroscience. And this is great because this is like our wheelhouse. We love talking about this stuff. So are we basically hardwired to make bad economic decisions? Do you think

Mark Matson  27:09  
we are super hardwired for terrible economics? So

Tim Houlihan  27:12  
how do we overcome that?

Mark Matson  27:16  
Well, number one is, and you mentioned this earlier was number one, you have to be aware that it, that it even exists. And then once you're aware that it exists, a lot of people are, you know, like to say, Well, yeah, it exists, but not me. I don't have it. So it's a human thing. It's not a me thing or you thing. I'll give you an example of one, herding bias. Hurting bias tells human beings, as long as everybody else is doing it, that you're safe doing it. And instinctively, if there's a shark in the water and there's someone scream shark, and everyone's running for the you know, the beach, all right, your instincts worked and hurting bias worked. But that's not how investing works. The way, the way investing works is that if everybody's doing it very, very high probability that it's very imprudent and terrible and dangerous thing to do, and people have no idea how much real danger that they have. So everybody jumps on Bitcoin, and it's popular, and it's talked about, everybody dumps it in. They they're at the high. Everybody talks about, oh, the s, p, The Magnificent Seven, you know, Nvidia and Amazon and Apple, and that's all you got to buy, and you're going to get filthy rich. You and everybody jumps on. But it's not just one bias. So that's one the hurting bias you want to do what your friends are doing. It's also prestige bias. We like to do what other people are doing, because it makes us feel prestigious. Oh, I got an Apple phone, and it's so great company, and it's wonderful and look how prestigious I am, or buying a hedge fund. People aren't going to go to the country club and say, Look at me. I'm super rich, although someone might, but they said, Oh yeah, well, I just put 100,000 in this hedge fund, trying to telegraph to everybody else how sophisticated and brilliant you are. Yep. So these, these, these instincts, emotions and biases, they're swirling around all the time, making the decisions if you're buying, if you're selling, the friend filters, a terrible one. This is one that I evolved myself after 35 years of watching this happen. Many people will will be attracted to someone that's charismatic and friendly, to manage their money, because they feel close and safe with somebody if they and they have that feeling of affinity, and they feel like they can trust them and that it that that is a sure sign of disaster. Faster, because there's absolutely no science whatsoever that a person that you feel friendship or closeness with is competent. It would be like, I'm going to get on an airplane and go through a massive storm. Do I want the guy that's telling jokes, you know, when I walk onto the plane the pilot, or do I want to want the guy that is is stone cold killer that's, you know, flown for 50 years through these types of storms, and I can count on them. Competency and friendly and friendship and charisma have almost zero correlation. But people make that mistake all the time.

Kurt Nelson  30:36  
Yeah, I can see. I mean, you think about all of the premier athletes and the the number of times that you hear about them being, you know, just losing all their money, and you're going, how can you do that? You have, you have made millions upon millions. But I think many of those times, when you look and peel back some of those, you know, the reasons why I invested with my friends, they, you know, I had these, this, this great person who was coming and, you know, and it wasn't based upon any of those. Like you said, I want that pilot. He can be grumpy and Surly and whatever, but I don't care you're flying the damn plane. I don't, you know, just fly the plane and get me safely to where I need to go. You don't need to be my best friend, right? And that that's the same thing as I think what you're saying from an investor perspective, but that's not how we view

Mark Matson  31:27  
it. It's not and it's so seductive we don't even know we're doing it.

Kurt Nelson  31:34  
Hey, this is Kurt, and we want to say thanks for listening to behavioral grooves, and we hope that you're enjoying this episode, but it feels a little bit one sided. You're hearing from us, but we're not hearing from you.

Tim Houlihan  31:46  
This is Tim, and we have two suggestions to remedy that. The first is join our Facebook page and engage with us. We want to talk

Kurt Nelson  31:55  
with you. We want to hear your perspectives, and hopefully our Facebook page might be the place to have some of that interaction. So please, please come and join us.

Tim Houlihan  32:05  
The other recommendation we have for you is to leave us a quick rating, you know, the little five star thing at the bottom of your app, or a short review. Just leave us a few words about what you like about behavioral grooves. We'd very much appreciate it.

Kurt Nelson  32:18  
Thanks, and we now return you to our regularly scheduled programming. All right, so, so one of the things that we love here at behavioral grooves is big fans of learning from really bright people. Nobel Prize winners are great example, and you took some lessons from Harry, Harry Markowitz, right? And I'm horrible with the pronunciation, so Tim is usually the one who handles all the names right, but he had the Nobel Prize in Economics in 1990 So what were some of the lessons learned from him? For you, Mark, and can you share maybe some of those with us and our listeners? Because, yeah, we love learning from great people like

Mark Matson  33:03  
you. Yeah, Harry, if you live long enough, you'll see a lot of your heroes die. Yeah, and it's a sad thing when it happens. And I in 1986 when I was in college studying investing, there was a huge book that they had. There was one chapter dedicated to a concept called Modern Portfolio Theory, and that's what Harry Markowitz evolved at the University of Chicago and would eventually win a Nobel Prize for. At the time, they didn't even have the in theory, it's set. He had the math to show that would work, but they didn't have computers sophisticated enough to take all the different asset categories and all the different stocks and feed in the data to actually calculate if and show the results. So he was really way ahead of his time and and when I read it in college, I was shocked that the professor didn't spend more time on that chapter, because I knew it had to be right. And basically what it says is most people don't understand diversification. They think that owning a bunch of stuff equals diversification, but you can own every single stock in the s, p5, 100 and have virtually no diversification, because they're all highly correlated, so that when one of them crashes, they all crash. In addition, most people weight their portfolios. If they bought the s p5 100 index, the s p5 100 is market weighted. That means the companies the biggest seven are or 10 or 20 are the vast majority of the s, p. So you've only got maybe 20 holdings, and those 20 holdings are massively correlated. So when one crashes, they all crash. They all have a high tendency to crash together. Harry said, and this was very counterintuitive at the time, Harry said, Look, we can actually measure. Of correlation between asset categories. And we can look over long periods of time, 7080, years, and we can see the average expected mean return of those port of those asset categories. And then we can use correlation matrix to understand how similar so if they crash, they're both crashing at the same time, or how dissimilar that they actually are, then what we can do? We can we can build a portfolio that's mean variance optimized, which means that the mean is the average return. I'm getting the highest possible return with the smallest and they measure it with standard deviation, with the smallest variance. And the goal is to get the highest possible rate of return with the lowest amount of volatility, and then to be able to measure that volatility. Those are the 2 million things people are completely in the dark about. They don't know how to create expected returns based on their mixes, and they, for sure, don't know how to measure volatility of their portfolio. I always ask investors, well, do you know is risk important? They say, yeah. And I said, Well, do you know how to measure risk? They'll go, no. And I say, Well, do you think you can measure something you can or you can control something you can't even measure? And they'll go, oh, I guess not. I'm like, and that's what Harry, that's what Harry, I think the other thing, the other mistake investors make is they vastly oversimplify the process, and they ignore the 80 years of academic research that that these Nobel Prize winners, statistician, economist, have spent, and instead, they think it would be like reading a little manual over the weekend and think you can operate a 747, it's absolutely absurd, although 50% of men say if the pilot was just was incapacitated, 50% of men, not women, 50% of men say, if they talk to the control tower, they could land the plane. Yeah, just for the record, it's never been done, and pilots of commercial airliners will tell you it can never be done. So overconfidence bias is another one that we all have, whether it's driving or how to build our portfolio.

Tim Houlihan  37:28  
Well, let's go. Let's stick with Harry Markowitz is brilliant pearls of wisdom here. What can we do to overcome those shortcomings? How should we be thinking about investment choices and the way that we invest to avoid these foibles.

Mark Matson  37:45  
Yeah, so the first thing, three things to eliminate the number one. So whether it's a diet, what I do a diet is what I do, and what I don't do, what I eat and what I don't eat. You know, investing is what I own, what I don't own, but you got to understand both of them. So the first thing that you do is you eliminate gambling, you eliminate stock picking, you eliminate market timing, and you eliminate track record investing, trying to find somebody that had the good 20 year track record, and thinking that if, if you put the money with them, they're going to continue to beat the market going forward.

Kurt Nelson  38:20  
Well, they always give you that that piece, though, you know prior returns don't guarantee future return, right?

Mark Matson  38:28  
Yeah, exactly. What it should say is a manager's ability to beat the market in the past has zero correlation, none whatsoever, with their ability to beat the market going forward. Because if, if you could pick the right look fidelity, can't even find the next. Peter Lynch, they have 1400 mutual funds. If they knew what the best mutual manager was at any given time, they'd have one manager. Yeah, not 1400 funds. It shows you, they all they, they promote this false narrative that they are. You, maybe you're not smart enough, but we're smart enough, and if you give us the money and pay us 1% a year, we'll beat the market for you. So you want to, you want to eliminate that you know, like and it's the hardest thing to do because it's so easy to get sucked back in. If someone's making money in Apple, you want to own apple. And if. But you want to eliminate all that stock picking, market timing, track record investing, efficient market theory by Eugene Fama, who I got to work with, who is still alive. That's the bottom line for his research. The second thing you want to do is you want to identify how much risk you can really take and investors dramatically overestimate how much risk they can really take and how much risk they are taking. So for example, it's easy for stocks. Most investors right now are 7080, 90% in large US stocks, and I know this because we measure 10,000 portfolios. Plus a year we analyze them, when investors come to us, that means that you could easily lose 50 to 60% of all of all that money overnight and and most investors have no idea that they're taking, that they're taking that amount of risk. So you offset that risk by doing several things. One is you have to have short term high quality fixed income. So when the market does crash, and it will eventually, it's not if, it's when, then you can sell that short term high quality fixed income and buy more of it while it's down in two, 2020 when the pandemic hit, large stocks lost 30% in one quarter. In three months, they lost 30% but we rebalanced our clients, selling the fixed income, getting the portfolio back to 5050, let's say. And then later that year, small, small stocks were at 50% in the long in the last quarter of the year. But if you didn't rebalance, you didn't get it. And if you panic, you sure didn't get it. And a lot of people were panicking at the time. And then you want to diversify internationally. You cannot. You simply cannot, have all your money in one country. We're in over 78 countries with 27,000 individual holdings. You want to diversify like crazy. And for example, the S P is up in the ballpark of 9% so far this year. Large value international stocks are up in the ballpark of 33% this year. So you want to and then you want to rebalance it every quarter, and you want to stay disciplined. And that's the hardest thing of all to do. Oh, yeah, yeah.

Tim Houlihan  41:41  
You have argued that money should serve life goals, right? Not vice versa. How? How can we shift that thinking? Because so oftentimes it seems like people are kind of caught in this world of my life goal is to make money. My life goal is, is the money not money serving the life

Mark Matson  42:01  
goal. Yeah, boy, that is so true. You know, as a young man, 21 years old, starting up in the money investing industry, I had an illusion that if I could help my clients build their portfolios. Say, if you start with someone with 2 million, you help them get 5 million then they would be happier, feel safer, feel more secure, have more peace of mind. I found that completely, completely to be false. Yeah, there's zero correlation between how much money you have and how much peace of mind you have. The other, the other True statement is that having a lot of money does not make you happy, right? It absolutely doesn't. And you don't have to be a scientist to figure that one out. You see people like Elvis and Marilyn Monroe and Howard Hughes and you know, even modern day billionaires like Elon Musk and so forth, you read their biographies and their their life itself. Steve Jobs, you wouldn't want him as a husband. You wouldn't want him as a father to your child. You wouldn't want him as a parent. Yes, they made a lot of money and they, you know, you can make the argument, they've increased the quality or standard of life for millions of people, but but being having a lot of money does not make you happy, does not make you good person and doesn't give you peace of mind. And that's very counterintuitive to people, because they spend 45 years of their life trying to get more money. So then you say, well, if money doesn't make you happy, what does? And what I've experienced is having a purpose for your life that then your money serves that purpose, that can actually help bring you fulfillment and create an amazing life for you. The money comes second. So So, for example, my true purpose for money and for life is to help people attain their financial freedom with the American Dream eliminates stock picking market time, stop gambling with their money, and then help them have a purpose. If I have a purpose, then I don't really need money. I can, I can go visit a friend in the hospital, hold their hand, make a card with a piece of paper, tell them how much I love them. I can volunteer for charity. I can, you know, there's so many things I can do that creates a connection and love and freedom and fulfillment, but if I get the money first before that, it's a recipe for danger. So I

Kurt Nelson  44:33  
think this is a really interesting kind of line to go down, because then that lends us into this, this question of like the word enough when it comes to wealth, is there is, do you ever have enough? Is there a way to measure? All right, I have a purpose. I get that. I'm working towards that. But is there enough when it comes to wealth, investing, those kind of things, from your perspective,

Mark Matson  44:58  
I think enough. Enough is goes back to utility. Do I have enough to eat? Do I have enough? Do I have clothes? Do I have shelter? Do I you know, even in America, if you're making Think about it this way, I always tell people, if you if you're making 50,000 70,000 a year, obviously, you would probably have a goal to make 150 or 200 300 and that's, there's nothing wrong with that. That's great. But the reality is, if you only make $50,000 a year, you live better than the richest person on the planet 3000 years ago. Yeah, 3000 years ago, they didn't have artificial hips, they didn't have penicillin, they didn't have air conditioning, they didn't have chocolate, they didn't have all the modern miracles. They didn't have anesthesia. If you needed surgery, you were really in trouble, even in the Civil War. If you needed surgery, some guy with the hacksaw is going to come at you and cut off what's left of your arm. I mean, we have so many miracles around us every day, and you have people on, you know, on on Instagram or Facebook, you know, crying and whining and bemoaning this country and capitalism and free markets, and they live better than 95% of the people on the planet, forget in history today, just today. I mean, to live in this country, if you can't be happy right now in this country, you are never going to be happy, period, because you got it the best you're ever going to get

Kurt Nelson  46:38  
it. Yeah, I love the you know, I've heard the piece too, like, look, we live better than kings and queens did 300 years ago, right? We have electricity running hot. A shower. You have a hot shower. Hot showers were like that. Who knows? You have soap that isn't lie, that doesn't like burn your skin. I mean, think of all of in the thing is, is that we, we often, to your point, we become, we become kind of, this is just the the this is how it is, and we don't appreciate what that means. I mean, this is this really air conditioning. I'm living in hot weather right now. I mean, my God, it's 90 degrees, and without air conditioning, I'd be sweating up a storm and feeling miserable, right? But we have it, and I'm lucky to have it.

Mark Matson  47:30  
Yeah, we really are. And, you know, I tell people that are worried about, you know, you guys remember when, when this whole thing about AI initially came out, which was the Terminator, produced by James Cameron and starring Arnold Schwarzenegger in it as the Terminator, the evil guy robot. Ai won't have to do that. You won't have to be robots. All I'll do is have to turn off our air conditioning and our in our heat, and 90 90% of us will die. I mean, it's 115 outside right now in Scottsdale. We won't have refrigeration, we won't have food, we won't have and we're so we're so softened up by all these modern miracles that we have, and it's easy not to be grateful. That was also, that's also part of what my dad taught me about the American dream. He said, Look, men and women, have died for your for this, for you, you should be grateful every single day, and thank God, and thank the people that died for you, because without it, you'd be speaking German right now. It's a miracle that we're here, that we have this great country. And you're right, you live with $50,000 a year. You live better than the king or queen of France or England or any of those places. I wouldn't trade places, not, not, not for anything. Well,

Kurt Nelson  48:50  
you just talked about like, you know, just the anesthesia, you get some anything, I mean, just, it's crazy. And our life expectancy, like, even in the past 150 years, they've gone from average of 35 to 78 right now, or whatever it is. I mean, it's because, you know, I am living so much longer than my great, great, great, great grandfather ever could have even hoped for. And it's just, it's pretty amazing when we think about that, right?

Mark Matson  49:16  
So, when I was born in 1963 the average mortality rate of a man in the United States was 55 Yeah, and I'm 62 now. And now the average isn't well in the 70s for the average male women are got a couple, two or three years more on us, but it's a miracle. We play this morbid game. Sometimes it's called who'd be dead. And you go around the kitchen table and you know, I had a stupid stuff can kill you. I had an infection in my elbow, and it started to get really bad, and the doctor didn't know why I got it. I didn't have a cut, I didn't have anything. I said, Well, what would have happened 200 Years ago, he was like, well, your arm would have got as big as a watermelon, and then your blood would get infected and you'd be dead, no. And we have miracles all around us all the time.

Kurt Nelson  50:11  
I It's interesting. My, you know, my first child was pike breech, which, you know, they had to do a C section. My wife and child would have died, more than than likely, I wouldn't, and then we would, my second child would not be here because of that. So you look at that, that is a, you know, even, you know, 100 years ago, that could not have happened. So, yeah, it's crazy. So okay,

Tim Houlihan  50:36  
we are talking with Mark Mattson about his new book, believe experiencing the American dream. And here on behavioral grooves, we like to talk about people finding their groove and Mark. We're interested in one of the things that we, we have tended to see, is that, and I think that you're talking about this, is that there's a very individual definition that we can have for success and meaning and purpose. This comes down to something about that's very individualized, but people get caught up in trying to live by someone else's version of what success ought to be. What kind of advice would you give to people to help them find their groove?

Mark Matson  51:13  
Yeah, if, if you don't create it, someone else are like you said, Tim, if you don't create it for yourself, somebody else has created a version that they hope you adopt. And it's, it's a vision of what you eat, what you drink, what you wear, how you live your life, what you believe. So they have, you know, they can make money by twisting your screens and have you act and behave in certain ways that are extremely profitable for them. Politicians are also very good at doing this. They're good at doing this on TV. They're great at doing it on social media. So number one, so I always tell people when you're trying to find your purpose, number one, realize that it's not out there. It's not something you go and find. It's not like a mountain that you find in climb. It's not something that already exists inside of you. There's no purpose organ you. It doesn't exist. You're not born with it. You know. You just you know you You're pooping and peeing and eating, and eating, and that's about all you can manage. And, and, and, and so you're not born with it either. What you have to do is you have to take agency over it and create it. And the way that you create it is you sit down and you look at if and say, If I had, if I lived my life this way for this purpose, would I be inspired and uplifted by my own life? And then you start to create your purpose, and in no matter what anybody else says. And if you have a powerful purpose, here's kind of a key for it. If you have a powerful purpose, there are going to be people try to run you down. They're going to people try to tear you down, try to attack you, no matter who you were, whether it was Lincoln or Martin. Luther King, Kennedy, Reagan, Winston, Churchill, anybody Gandhi, anybody with purpose in their life, the Wright Brothers, anybody with purpose is going to take a lot of flack, and they're going to take a lot of hate, especially on social media these days. So that's kind of a hint. Don't let other people dictate it. Create your own and you ask the question, if I live my life in this way and get creative about it. Write down, take notes. Take your time with it. It's not something you just get in a second. Take your time with it. Explore it. If I live my life in this way, would I be inspired by my own life? And when you can answer yes to that, you got your purpose? Wow.

Tim Houlihan  53:57  
I love that. Thank you. Thank you for sharing that. That's fantastic. What you know, I gotta say that it very early in the book, you tell this story of a car trip with your family, and you're singing Jimmy Buffett's Margaritaville. It sounds like there's a contest to see who who could sing the loudest. Right?

Mark Matson  54:17  
We were very loud family.

Tim Houlihan  54:21  
Tell us. Tell us about this experience and what happens over time as you're singing Jimmy's lyrics. Yeah,

Mark Matson  54:32  
I love that song. I still love that song. It seemed, it seemed like that, that summer in the 70s, they played it every, every third song, oh, at least it was country and pop. He managed to thread the needle on that the if you look at the song, it's, it's a metaphor for taking responsibility. So, you know, obviously he's drinking Marguerite. Deville, nothing's really going on with his life. He's kind of run down. He's lonely. And he says, Well, you know, it's nobody's fault, even though they say it could have been a lady's fault. No, it's probably nobody's fault. And then he says, later in the song, he says, well, it could be my fault. And then later he says,

Tim Houlihan  55:22  
It is my fault. It's my own damn fault.

Mark Matson  55:24  
It's my own damn fault. That's exactly, exactly it is my own damn fault. And I think that's a good analogy to look at our life. It's not it's not your boss's fault, it's not your spouse's fault. It's not your kid's fault. It's not to the extent you don't have the life you love. It's your own damn fault, and that's actually a good thing, because if it's dependent on other people, you can't change them, but at least you got a chance at changing yourself. And I always loved that song for that reason. And, and, and, and he was a great example of somebody that found a purpose entertaining people, being there for people, curating fun for people. And of course, eventually died of cancer. But it's

Tim Houlihan  56:19  
also a children's book author and, you know, great philanthropist and remarkable guy,

Mark Matson  56:24  
actually, just a good dude, and he lived a purpose. And I think he's a good example in that way too.

Tim Houlihan  56:30  
Yeah, I was hoping that when we were talking about the very first speed round question about a new language or a new instrument, you might bring up the the tin sandwich,

Mark Matson  56:43  
you read it Well, I tried, I tried. My grandpa gave he was great at that, and he was great at a lot of things. He was an avid reader. He read a book every week. He could play that, that harmonica, like getting nobody's business, but he gave it to me. I don't know what happened to it over the years. I do have the clock, though that was in his in his family room, the one that he got from working for 25 years at Union Carbide, and we still have that today as a reminder of the hard work look, even though he had the screen that really didn't believe in the American dream. I owe a deep debt of gratitude, because he did work in those coal mines. He did work in those factories. He didn't give up. He didn't go on welfare. He detested the idea of welfare, so he was a hard worker. And the only reason we got my dad got where he got and I got where I got is because of the hard work that he did in the hills and hollers there. I recognized that as I wrote the book that maybe in the beginning I was too hard on him, but by the time I finished up the book in the end, I thanked him, and I'm still grateful today for all the hard work he did to get us where we got

Kurt Nelson  57:58  
all right. Mark, I will ask a musical question that Tim usually asked, but I'll, I'm gonna go. So imagine

Unknown Speaker  58:06  
yourself. Just be careful. Just be careful.

Kurt Nelson  58:10  
Imagine, imagine you are. You are on a desert island for a year. You're there. You're by yourself. You get all the food, everything, all the comforts that you have, but you have, you've just one musical, like a like an old iPod, but it's a it's a weird one, because it only will allow you to put on the musical, any music by two artists, just the two artists. It can be a band, it can be an individual. You get their entire catalog, everything they've ever worked on, everything they've ever done, but you don't get, like, a variety pack, right? You don't get Pandora or Spotify. You have to pick the two. This is this. These are the two which, but you get to pick them. Which two are you gonna pick?

Mark Matson  58:50  
Oh, this is easy for me. So, so, so I my favorite artist of all time, even since the 80s, is Billy Joel. I love his music. I love how versatile he is. He really fought hard for his career. There's a great documentary, I think, on Netflix, my wife and I just watched about his career and his life, and I just never could I mean the Fathom writing, writing the music, and then also writing the words, which were very poetic and seemed to be very deep to me, of the human, human existence. So that's one and the other one. I love country, and I'm right now I'm on a Morgan Wallen kick, and we just went to the concert. So it would be Morgan Wallen and Billy Joel. I love

Tim Houlihan  59:46  
that I see. I think that that's this is, this is a great investment strategy diversification, right? You didn't, you didn't go for Billy Joel and Elton John.

Mark Matson  59:58  
You know, I do like me. Mountain John, though I do like some

Tim Houlihan  1:00:01  
fair enough, but you didn't choose two piano players.

Kurt Nelson  1:00:04  
It wasn't part of Billy Joel's life, though, that he got taken by his manager and lost. He

Mark Matson  1:00:09  
did, yeah. Tale, yeah. It was his wife. His wife was his manager for quite a long time, and then they split and divorced over his drinking. And then he hired the brother in law, and she said, Don't do it. But he did it anyway. And he 10s and 10s of millions, maybe 50 million. He this guy stole from it. Oh my gosh, oh yeah. He had to go back to work. He was kind of he was semi retired at the time. Well, he played 100 shows at Madison Square Garden. I think he made about a million dollars each per show. So he was, he had a heck of a comeback.

Tim Houlihan  1:00:51  
Yeah, that's, that's a very speedy comeback. Wow, wow. Mark Manson, what a pleasure it is to have you on behavioral grooves. Thanks for being a guest today.

Mark Matson  1:01:01  
Thanks so much. It was great. It was great fun.

Kurt Nelson  1:01:12  
Welcome to our grooving session where Tim and I share ideas on what we learned from our discussion with Mark. Have a free flowing conversation. I really mean that we're gonna have a free flowing conversation, and we're gonna groove on whatever else comes into our conflicted brains.

Tim Houlihan  1:01:29  
What's conflicted for you? Let me just

Kurt Nelson  1:01:32  
sit there. I mean, we talked about this in the intro, and there are some parts of this conversation that I really agree with I love a lot of what Mark is saying, and there's a lot of good research and backing of some of the things. But then there are other parts that I think are not necessarily outwardly wrong, but they're making assumptions about things that it's easy for everybody that all you have to do is this that, you know, if you just got rid of your victimhood mentality, you know, then the world will open up and the American Dream is yours to take. And I don't know if that accounts for the systemic components within the United States and the American society. I mean, we are three white guys talking about this, yeah, this is, this is not the RE lived reality of women, of people of color, of people who have a different accent, there are factors that play into this that aren't just as easy as work hard, have a work strong work ethic, and don't play the victim and don't feel entitled, and You will succeed and everything will be hunky dory, yeah.

Tim Houlihan  1:03:04  
And I think it's also worth pointing out that we enjoy talking to people about their opinions because, because our opinions are kind of help, help sort of inform where we are in the world. And I think that that's important, and we need to embrace that. And I love that about being human right in this, in this. And by the way, we talked to lots of authors who who have opinions that are that they've done a lot of research. Mark. Mark is a very smart guy. He's done a lot of research and and he's, and he's he's formed these opinions about his thesis based in large part on some of the on the research, but also largely informed by his his personal experience. And we can't easily subtract the two, you know, each from each other. So so it kind of puts us in a well, this is where we are. I think that the challenge for me, maybe the conflict for me is that some of his conclusions, I think you alluded to this, but for me, I share this, that that when his conclusions diverge from the evidence, from the from the by and large, the scientific agreement that this is sort of how things are. You know that that's when it gets challenging for me, that, yeah, that's actually when it when it's hard. I mean, as they say, gravity is, is a theory, and we have a lot of theories about about social interactions and societies and how they work, and, and some of them are based on a lot of really good science and and it lacks nuance to, as you say, to kind of focus on this idea that if, if we just pull ourselves up by our bootstraps, we can do anything we want. I'm just not, not totally

Kurt Nelson  1:04:58  
there. Yeah. And. Mean, gravity is a theory, but I'm not going to test it by jumping off a five story building without a parachute, you know? I mean, there are good Yeah, I think this is the key piece and why we struggled. I mean, we really did struggle with thinking about this and and it's sad, because we aren't very confrontational, and I know we had some issues going into this and talking with him, but there's a lot that we align with Mark, and there's a lot of really good stuff. I mean, he talks about how our brains are not suited for the world we live in. That is true, that's based on good science, right? We evolved in a whole different concept in world, and particularly if you're an investor, you know this, this idea of pain happens, so we get a run away from it. Well, that's not in the investing world. That's not necessarily the best thing to do. So,

Tim Houlihan  1:05:55  
yeah. Well, and as an investor, Mark looks at people who, if you make $80,000 a year. He, I think he brought this up that you're in the top 1% of all the people in the world, like your income is. And I think he did a great job of saying, You got to express gratitude

Kurt Nelson  1:06:12  
for that. Yeah, I think that is a fantastic piece, right

Tim Houlihan  1:06:16  
in the top 1% of all all people in the whole world. And a couple of other things just really quickly that I really love money doesn't make us happy, no, yeah, to some extent it, it certainly makes, you know, makes it easier.

Kurt Nelson  1:06:30  
But if we don't have it, it doesn't, it makes us worse. Life is worse. We know that empirically, that's been shown,

Tim Houlihan  1:06:37  
yeah, but we also know that that research on if once you get to $75,000 to, you know, you're not happy with that's sort of been debunked. Newer research has come out and said, Actually, there are, there are ways to actually elements of life that you can be happier with the you know, the more money you make. But it isn't the the source of happiness. It, you know, money is just not the source of happiness. And Mark also just noted really in a really wonderful way that it's fair to that our brains are kind of, you know, kind of narrow in the way that we think, because we need to simplify complex issues. And in fact, our tendency is to over simplify complex issues. So investing is complex, and it's difficult, and you can't just read a manual for a 74, 747, and learn how to fly it. You know

Kurt Nelson  1:07:29  
this, that was very true, right? Don't do that. He brought up some really good things, like hurting bias that we have. This, this, you know, social proof component works really well in, like a lot of our evolutionary component doesn't necessarily work well in investing, right in financial components, yeah. I mean, there are lots of those factors that I think, you know, we align around, and I think we as you know, I'm taking them to heart. This idea that, hey, this is something when I'm putting together my investments I should be thinking about, right? Yeah, and I do really love that the, you know, he talks about a couple other things that are more prescriptive from a kind of philosophical perspective, the idea of being grateful, right? This idea of not having an entitlement, you know, his story about going into the doctor's office and, you know, like all these people in here who are much worse off than him with his, you know, hip that there's real truth in that we too often feel we are entitled to many things, I think, right? And so that is there. I think that's an important aspect of this and stuff that I want to really take to heart.

Tim Houlihan  1:08:56  
Yeah, it's really, actually a beautiful sentiment, and I really appreciate that that Mark brought that up and wrote about it and and then reminds us that if you're if you're doing, okay, be grateful for it. That's that's a really good thing to be reminded of, to bring to to our table. He also went on to say something. He said that write down your life. And if you're inspired by your own life, then you've got it, right. And, and that was an example for me of sort of lacking the nuance of how much control do we have over our own life. Yeah. And, and maybe this is the fundamental maybe it gets to a more fundamental issue, the questions if our life is in part determined by our genetic genetic code, right? That's going to have a strong influence over our intellect and intellectual capabilities. We're going to be influenced by our environment, like, yes, the family that we grew up in, the the neighborhood that we grew up in, the hills, valleys, rivers, mountains, towns. Owns everything that we saw when we were growing up. All that informs who we are and how we think about the world and and whatever kind of purpose we develop in life is probably going to be shaped by things like genetics and our environment. So how much control do we have over that? Just to say, if you're not inspired by your own life, then it's your fault. I don't think that that fully acknowledges sort of the nuance of how much of the difficulties that we have in controlling our own life. Or

Kurt Nelson  1:10:33  
I think that is, I think you just nailed it. I think that that is a key aspect of this. And he talks about his grandfather having this victim mentality. Well, the context with which his grandfather lived drove a lot of that, and it's it's one thing to say, just stop having a victimhood mentality, or just build a work ethic. But if you've lived in a environment and and of social, family construct, and it's not saying that you can't get out of that, that I don't want that to come across. I don't want it to come across as, Oh, you are constrained by your conditions, and that there is no hope if you are born into this, the of this skin color, and you are born into this economic component and this family thing. There's lots of examples of people breaking free of that. It's not as easy as just saying, I don't I don't want to have a victim mentality anymore. Our brains don't work that way, right? I mean, we talked with Robert Livingston, and he talked about where you start makes a difference. And like, if you're running a race, you know where you start determines how, how good you're going to be able to run that race. Are you going to be able to pass anybody? I mean, if you're starting 100 yards behind the the next person, and it's a 200 yard race, you're, you're not going to be able to to catch up, right? I think that's, that's, you know, you got to be super human in order to do that. And I'm not saying that that's not, not something that we can't try to improve in various different pieces, but we have to take that into account, right?

Tim Houlihan  1:12:21  
Absolutely. There's a great Israeli philosopher named goldrot, and he talks about necessary but, but not sufficient. So like, and he uses this great example of like, flour. If you want to make bread, you have to have to have flour. It's necessary, but it's not sufficient. To make bread, you can't make bread with just flour. You also have to have yeast and salt and water, right? So when we think about a world where people have drive and interest and desire, that's necessary, but it's also not sufficient. It's not enough just to have motivation and have the right mindset, because there are other things that conspire to work against us from it. You know, randomly in the world,

Kurt Nelson  1:13:17  
we talked with Jens Lud about violence, right? And homicides and gun violence and various different things. And I'm going to transpose some of that into some of this as well, because what he talked about is that the neighborhoods that you grow up in influence the violence that happens there for a number of different reasons, but one of them is how you learn to respond to the world around you. And if I grow up in an environment where any transgression against me, if I don't push back against that, I will become a patsy, and it will just get worse, and I will be taken advantage of, advantage of so I learned I need to strike back, push back. I need to respond in a certain way, which isn't the same way that I think you or I were raised, and different pieces, and probably not the same way I'm making assumptions, but not the same way that many other people have right and those are the situations. So I can have drive, I can have all of the stuff, but I also have these other factors that have been learned because of the context of my environment. And so I might even have all of these necessary pieces, and I might have a few more that are pulling me back, as well as the things that are pushing me forward, yeah, and that takes a lot to overcome, yeah, not that it can't, but it takes a lot to overcome.

Tim Houlihan  1:14:53  
Yeah, I think you're referencing with the other things that are sort of invisibly slowing us down. Are the headwinds, where, where, some of where we oftentimes have tailwinds. I mean, I think about the tailwinds of being white and growing up in a family of, you know, relatively decent means, certainly by no means, rich, but, but well enough off that we never missed a meal, never missed a mortgage payment. I actually that's kind of silly, because my my parents owned the bone, were part of the owners of the business, so, so that wasn't but, but they made payroll. They they did all those things. I had tailwinds that allowed me to take advantage of things in the world where other people have headwinds that we don't see, that aren't visible to us. It just at a glance and, and I don't want to, I don't want to reduce my version of anybody's life, whether, wherever they are in the socio economic scale, to what I can see. Yeah. I just want to be more willing to take in the complexity of it, right?

Kurt Nelson  1:15:59  
I mean, and I think you just summarized dolly chug in our conversation, one of our conversations with her about that headwinds and and tailwinds. And I think it's so apt for this. And there's just the last piece that I want to talk about on this is Mark said nobody owes you shit, or that's how they think his his dad said, and he repeated that, yeah, yeah. And I don't think that's 100% true either. I mean, there's a part of it, right. Nobody owes me a paycheck. Nobody owes me definitely a certain component. But we live in a society, and because we live in a society, I owe you a certain amount of respect and consideration and other things. So I do owe you something. I owe everybody certain amounts of those pieces. And you know, I owe the fact that I shouldn't judge you by the color of your skin or if you have an accent, or if you are wearing clothes that look different than what I'm accustomed to, or other things like that. And that, I think is, is something that, no, we do owe each other shit. And yeah, it's not a paycheck. That's not like I don't you know, those kind of things, but that's not 100% true.

Tim Houlihan  1:17:27  
You know, we at behavioral grooves. We want and need opinions that are different from our own. We don't want to live in an echo chamber, and I know that to a large degree we do. So I'm just going to acknowledge that. Amen to that right now. But the research says that when we solicit resources, you know, from well known behavioral scientists who do good work, that it's more likely that we're going to come up with hypotheses and ideas that are evidence based. Yes, right? It also kind of says that we also need to pay attention to the research that doesn't necessarily conform to our viewpoints, you know, and I, as I'm just going to say, I actively subscribe to some researchers who have different takes on, on on the research, to keep me informed, to Keep me aware in our friendships, I think that it's important for us to to have a variety of different groups that we belong to, that we can have belonging that's bigger than just my one little, tiny, super hyper centric thing, whatever that is, that that I can get out and breathe and be sort of different aspects of me in different with different groups of people. So I think, I think that it's important that we, it would be hypocritical of us to say that we, we want others opinions, and then not have Mark Mattson as a guest.

Kurt Nelson  1:18:57  
Yes. And thank you, Mark for being on here, and thank you for your thoughts and and for your your ideas, because I think they're great ideas, and I think we can learn a lot from them. And to your point, Tim, we need to listen to people who don't agree with us 100% or we don't agree with them 100% I think that is a admirable piece that that this idea of, you know, we live in our echo chambers, and if you have any idea that is outside of the the idealized norm of that echo chamber, you are outcast, is, is a dangerous one, and I think that we need to take On, I love your idea of, you know, subscribing to scientists or others who you don't necessarily agree with. And sometimes it makes your stomach churn when you look at it. And those are the times when I think you need to actually double down. It's like, why is that making your stomach turn? And what about that? And. That's when you need to pay attention. And so with that, you know, I think at least I'm hoping that we're exhibiting some epistemic humility here, that we're, you know, coming from the Midwest, we conflict is not our thing. We we don't do conflict. Well, I don't, I don't think it makes me physically ill when we get into these things. And so even like having this conversation where we're kind of talking about it isn't, isn't the easiest, but hopefully we're allowing those different viewpoints to be out there, and for our listeners to be able to take them in and take what you take out of it. And you know our opinion is ours, but you have your own opinion. Take your own make your own decisions

Tim Houlihan  1:20:47  
Absolutely. And we hope that you use those, those opinions. We hope that you use this conversation, that you have the thoughts about Mark mattson's ideas, and you put them to use this week to help you to go out and find your groove. You.

Transcribed by https://otter.ai