In Morgan Housel’s new book, Same as Ever: A Guide To What Never Changes, he posits that we should stop trying to predict the future. Instead, we should use what we know from the past to help us react to changes as they inevitably come up. After writing the bestseller The Psychology of Money where he looked at spending habits to understand how people make sense of the world, Housel decided to address the collective. “I think in some ways The Psychology of Money is an exploration of the behavior of the individual,” he says. “Same As Ever is about the behavior of the collective, because it looks at what we keep doing.”

Here, Housel, who is also a partner at venture capital firm Collaborative Fund, talks about what we can learn from the past, the dangers of overconfidence, and why people think the economy is doing poorly, even if by most markers things are going well.

You have a lot of historical examples in the book to look at how our past behavior can predict the future. Why do you think looking back in order to look forward is a good approach?

It’s always rubbed me the wrong way how bad we as an industry—journalists, fund managers, advisers, economists—were at forecasting what’s going to happen next. Nobody can predict the next bear market, or the next recession. That’s an exaggeration, but only a little bit. After observing that, you can become even more cranky about it and say nobody knows anything. Or you can say, let’s focus on what we do know is going be the same in the future. We have no ability to predict change, so let’s try to focus all of our attention on behaviors that have been showing up forever, all throughout history.

Walk me through your argument—how can focusing on what’s never going to change be beneficial?

When you find something that has never changed, then you can put a lot of confidence into knowing that it is almost certainly going to be part of your future. Then you can focus all of your efforts onto that. Jeff Bezos had this great interview quote many years ago where he said, “People always ask me what is going to change in the future. I submit that a better question is, what is not going to change?” His example, when he thought about Amazon, was that you cannot imagine a future in........

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