When the World Wants You Typical

The Cost of Staying the Course

Bezos’s Parting Letter as a CEO

Jeff Bezos’s letters to shareholders from 1997-2020 are a treat to read with nuggets of wisdom in each one of them. I especially like his last letter in 2020 before stepping down as a CEO.

He gave a very different dimension to the purpose of existence of Amazon when he reproduced a paragraph from “The Blind Watchmaker”. I will first reproduce the paragraph as it is, followed by Bezos’s take from his letter on how it relates to each of us.

Staving off death is a thing that you have to work at. Left to itself – and that is what it is when it dies – the body tends to revert to a state of equilibrium with its environment. If you measure some quantity such as the temperature, the acidity, the water content or the electrical potential in a living body, you will typically find that it is markedly different from the corresponding measure in the surroundings. Our bodies, for instance, are usually hotter than our surroundings, and in cold climates they have to work hard to maintain the differential. When we die the work stops, the temperature differential starts to disappear, and we end up the same temperature as our surroundings. Not all animals work so hard to avoid coming into equilibrium with their surrounding temperature, but all animals do some comparable work. For instance, in a dry country, animals and plants work to maintain the fluid content of their cells, work against a natural tendency for water to flow from them into the dry outside world. If they fail they die. More generally, if living things didn’t work actively to prevent it, they would eventually merge into their surroundings, and cease to exist as autonomous beings. That is what happens when they die.

“In what ways does the world pull at you in an attempt to make you normal? How much work does it take to maintain your distinctiveness? To keep alive the thing or things that make you special?

We all know that distinctiveness – originality – is valuable. We are all taught to “be yourself.” What I’m really asking you to do is to embrace and be realistic about how much energy it takes to maintain that distinctiveness. The world wants you to be typical – in a thousand ways, it pulls at you. Don’t let it happen.

You have to pay a price for your distinctiveness, and it’s worth it. The fairy tale version of “be yourself ” is that all the pain stops as soon as you allow your distinctiveness to shine. That version is misleading. Being yourself is worth it, but don’t expect it to be easy or free. You’ll have to put energy into it continuously.”

-Jeff Bezos – 2020 Annual letter to Shareholders

Just stay with this thought for a moment. We will come back to this.

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I Already Knew I Wasn’t Supposed to Do That

Stanley Druckenmiller is one of the legendary investors in history. Thirty plus years without a down year at Duquesne Capital, legendary for his work with George Soros. He understood risk, discipline, and emotional control better than almost anyone.​

In February 1999, Druckenmiller concluded the obvious - the market was in a bubble mode. He shorted internet stocks. He was early. The bubble continued. Within six weeks, he had lost $600 million. He closed the short and booked the loss.​

Then something shifted. He hired two young tech enthusiasts who understood new economy stocks and rode the bubble back up, this time on the long side. By year-end 1999, the fund was up 35%.​​

In January 2000, Druckenmiller sold all his tech holdings well in time while the bubble was still on. He thought he made the right call just in time. ​​

Then he watched his two junior managers, the ones he had hired but given small allocations to continue, make 3% per day. Their tiny account was up 50% while he sat in cash. It drove him crazy. The envy, the FOMO, the sheer frustration of watching others make money while he was “right” bothered him.​

In early March 2000, in what he later called “an emotional fit,” Druckenmiller couldn’t take the pain of sitting out anymore. He bought billions of dollars in tech stocks. He caught the absolute top.​

Within days, the bubble burst. His Fund’s performance collapsed from a 14% gain to just 1%. Druckenmiller eventually lost about $3 billion in the crash.​

Years later, he reflected with brutal honesty in an interview: “You asked me what I learned. I didn’t learn anything. I already knew I wasn’t supposed to do that.”

When the World Wants you to be like Them

At about the same time the Druckenmiller story was unfolding, Warren Buffett was facing his own test. In 1999, the Nasdaq was up 86%. Berkshire Hathaway stock fell 20%. The world was minting overnight millionaires, and Buffett sat on the sidelines refusing to buy companies trading at absurd valuations.

The leading magazine Barron’s published a cover story asking “What’s Wrong, Warren?”

The narrative became: the old man doesn’t understand technology; his methods are obsolete; value investing is dead.

Imagine sitting in that seat. Not just missing out but being actively mocked while everyone around you gets rich. Even people who respected you wonder if you have become irrelevant. The pressure to join the party, to prove you have still “got it,” must have been immense.

Buffett didn’t budge. He stayed within his circle of competence, avoided businesses he didn’t understand, and maintained his discipline.

When the bubble finally burst, Berkshire’s approach was vindicated. But that vindication came after years of being “wrong” in the eyes of the world.

The work of maintaining his distinctiveness, his differential with the environment, cost him reputation, shareholder confidence, and psychological comfort for a long time. He paid that price continuously.

When Everyone Else Sees Gold

By 2015, Valeant Pharmaceuticals was Wall Street’s darling. Its stock had rocketed from around $5 billion to nearly $90 billion in market cap. The leading business magazines extensively covered the success of Valeant. The strategy was simple and brutally effective: acquire pharmaceutical companies, cut costs ruthlessly and jack up drug prices, sometimes by 500% or more overnight. Star investors piled in. Bill Ackman’s Pershing Square made it a huge bet. Sequoia Fund, one of the most respected names in investing, loaded up.

Charlie Munger looked at the same company and saw something different. Debt funded acquisitions and the practices of jacking up prices of life saving drugs.

He publicly called Valeant’s business model "deeply immoral" and refused to touch it.

When Ackman, who had made enormous paper profits, heard about Munger’s criticism, he wrote directly to Munger offering to arrange a meeting with Valeant’s CEO, essentially hinting, let me show you why you should change your view.

Munger declined. No meeting necessary. His principles were not up for debate.

Within two years, Valeant’s stock collapsed by 90%. The company faced congressional investigations for price gouging, accounting scandals emerged, and it eventually had to rebrand itself just to survive. Ackman’s fund lost billions. Sequoia Fund, legendary for its track record, suffered its worst performance in decades and lost clients.

Munger was asked about the company's spectacular collapse a year later.

"A sewer" he said.

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The Price of Distinctiveness

Stanley Druckenmiller, Bill Ackman, the managers at Sequoia - the people who lost money in these stories are also history’s greatest investors with extraordinary track records. Pointing out these moments is not an attempt to demean them.

The point is this:

Even when you know the principles, even when you have lived by them for decades, the temptation to yield to the environment can break you. Watching others get rich on easy money, battling the sheer exhaustion of FOMO and sitting on the sidelines while being mocked for being smart is psychological torture.

In each of these stories, the pattern is identical. The world pulled hard toward equilibrium.

“Be like everyone else. Do what is working right now. Don’t be difficult.”

That’s where Buffett and Munger stand out. Warren Buffett built his entire career on the exhausting, unglamorous work of saying "no" when something was outside his circle of competence. Charlie Munger spent a lifetime anchoring himself so deeply to his principles that the environment couldn't move him an inch.

Maintaining distinctiveness required a massive, continuous expenditure of energy, sometimes with no vindication in sight for years.

This extends far beyond investing. Take any other field, be it public service, education, healthcare or a corporate career. Most people start with pure intentions and distinct values. Then they watch peers cut corners, embrace shortcuts and become successful. It becomes a norm.

But more often, the environment doesn’t actively try to make you evil. It just tries to make you average. It tries to make you normal. It wants to smooth out your edges so you blend in. That is sometimes more dangerous.

If you want to maintain distinctiveness, you need to spend the energy to resist continuously.

And it is rarely about fighting the environment. The most difficult part is fighting our own vulnerabilities.

The fairy tale version of conviction says: “Just be yourself and the world will reward you.”

But the biological version that Bezos highlighted says: “You have to work constantly to stay out of equilibrium, and the moment you stop working, you merge into your surroundings.”

Being distinctive is not a one-time choice at the beginning. It is a continuous expenditure of energy. The world wants you typical. In a thousand ways it pulls at you, and the work of resisting that pull never stops.

And that work, that energy, is the price. But it’s worth paying. That’s what Bezos meant.

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