Super Investor: Howard Marks on Second Level Thinking

The environment we live in today is pretty complex. No moment is exactly the same. History, as they say, never repeats itself. You can never claim confidently that a set of causes will always replicate the same set of effects unless you’re dealing with hard physical laws.

Even if you do something with good intentions, the inherent complexity of the world will tend to produce results which you could never have anticipated. The world is complex and unfair. Here’s an anecdote to prove my point.

During the British government in India, the city of Delhi was facing the problem of too many venomous cobra snakes. To deal with the issue, government officials offered a bounty for every dead cobra. Initially this was a successful strategy as large numbers of snakes were killed for the reward. Eventually, however, enterprising people began to breed cobras for the income. When the government became aware of this, the reward program was scrapped, causing the cobra breeders to set the now-worthless snakes free. As a result, the wild cobra population further increased. The apparent solution for the problem made the situation even worse.

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