“The first principle is that you must not fool yourself — and you are the easiest person to fool.” – Richard P. Feynman
I’ve gone deer hunting three times.
I am a bad deer hunter. I usually listen to audiobooks and fall asleep in the deer stand. The only time I saw a deer was because the deer’s hoof stepped on a fallen branch that cracked very loudly and woke me up. I was so surprised that I jumped out of my chair, almost fell out of the tree, and scared the deer away long before I could even attempt to shoot it.
If you’ve never been deer hunting, the kind I’m talking about entails waking up at four in the morning and crawling into a deer stand, usually a folding chair (like you see at high school baseball games) strapped to a tree thirty feet above the forest floor.
You sit in the chair for four or five hours and turn on your spidey senses. If you hear a twig snap in the distance, you turn your head slowly, like the lone woman in a horror movie turning to see the serial killer with the kitchen knife behind her, and look intently into the woods in the hope of seeing a flash of movement that would indicate a deer.
The most important skill in deer hunting is being an incredibly intent observer.
Yet the difficulty of being an intent observer is magnified by how rarely your intense observation pays off.
99% of the sounds that you do hear perched in the stand aren’t made by a deer. They might be the crack of a tree branch under the weight of a fresh snow, or a squirrel running through the brush. To have any chance at killing a deer, you must very slowly scan the area from where each sound seems to jump. If it does happen to be a deer, the rewards are so large that even though you’re wrong 99 times out of a hundred, you still need to look.
This isn’t an essay about hunting deer, though. It’s about hunting cows.
Not your domesticated Angus or Hereford breed, but a breed of cow which shares more of the characteristics of a deer. This breed of cow rarely emerges from its hiding places in our minds and culture. It is almost impossible to see, even when in plain sight. It blends into the fabric of our world so seamlessly as to seem almost inseparable from reality.
The sacred cow.
A sacred cow is any idea, custom, or institution that you hold to be above criticism, often unconsciously. Sacred cows govern how most people live their lives, how they make all their day-to-day decisions from what time they get up, where they work to who their friends are. Yet, they are almost impossible for most people to see.
The term sacred cow is a figurative reference to the elevated place of cows in Hinduism, so that’s as good a place to start our examination of sacred cows as anywhere. Amalendu Misra, a senior lecturer at the department of politics, philosophy and religion at Lancaster University, diagnosed the case of a Muslim man who was murdered near New Delhi by a lynch mob on suspicion of killing and eating a calf.
The crowd didn’t think beyond what they considered an unquestionable truth: cows are sacred. Pound for pound, beef is the cheapest meat in India, cheaper than chicken, goat or lamb. They did not consider that most muslims eat beef for simple economic reasons and not as a religious statement.
This phenomenon is not relegated to Indian culture and actual sacred cows. It is true of any culture at any given moment in history.
If you read history, sacred cows are usually the things you read which cause you to ‘facepalm’.
There was the Spanish Inquisition which expelled the Jews out of Spain, when Spain was the leading European power (and arguably the leading global power). Jews were the artisans, bankers, and future of the economy. They fled to The Ottoman Empire, Holland and England and brought with them many of the resources and skills which led those countries to become global power players over the next four centuries. “Why would we want infidels in our country?” they must have said. Five hundreds years later and Spain has never again come close to being a global power player. ‘Facepalm’.
There was the Confucian bureaucracy in China, which reversed the policy of open exploration and made it a capital offence to build a long-range, sea-going junk after Admiral Zheng travelled from China to the Indian Ocean in the 15th century. Five hundred years later, after colonization, Opium Wars, and the Cold War, China is just recovering as a global economic force. “Why would we need to explore when we’re obviously the best civilization in the world?” ‘Facepalm’.
Or how about Xerox ignoring the personal computer industry because “PCs will never be a big market”? It was obvious at that time, a sacred cow, that the future of computers was the massive mainframe.
In his book Sapiens, a delightfully irreverent history of humankind, Professor Yuval Noah Harari observes that the European conquest which began in the 15th century and lasted until the 20th century was unlike all previous conquests in one major way:
Europeans thought, perhaps, they didn’t know everything.
Certainly, they thought they were superior to the people they were “conquering,” but they accepted that they were superior in only almost every way instead of every single way.
All previous conquests: From the Roman Empire, to the Babylonian invasion of Egypt, the conquerors had a sacred, black/white understanding of themselves and their cultures: “We are superior in every way and our conquest serves as proof.” Their superiority was a sacred cow, not to be questioned.
How sacred cow hunting made Ray Dalio $35.8 billion
Principles, the open-sourced manual of Dalio’s management policies (as well as his personal philosophy) provides some indication of how he did it.
A notable excerpt gets at the crux of it all:
“I follow the same basic approach I used as a 12-year-old … trying to beat the market, i.e.,
by 1) working for what I wanted, not for what others wanted me to do;
2) coming up with the best independent opinions I could muster to move toward my goals;
3) stress testing my opinions by having the smartest people I could find challenge them so I could find out where I was wrong;
4) being wary about overconfidence, and good at not knowing; and
5) wrestling with reality, experiencing the results of my decisions, and reflecting on what I did to produce them so that I could improve.”
The five steps Dalio outlines are a step-by-step guide to sacred cow hunting. A sacred cow slaughtering handbook. If there were a sacred cow arcade game like Big Buck Hunter, Dalio would undoubtedly be on the top ten all-time high scores.
It’s particularly interesting to look at the phenomenon of killing sacred cows in public financial markets. Unlike other domains where it’s hard to say exactly how valuable hunting sacred cows are, financial markets are easily measured.
As of 2011, Ray Dalio’s Bridgewater Pure Alpha hedge fund had returned to its investors $35.8 billion since it opened in 1975 – that’s more than any hedge fund ever.
In Michael Lewis’s The Big Short, he follows the story of three groups who are betting against the subprime real estate market leading up to the 2008 collapse. They were hunting sacred cows.
It was a sacred cow among builders, real estate agents, mortgage lenders, and banks that U.S. home prices could not go down, they could only rise. Former employees at rating agencies have said that, at the time, their risk model did not even allow for the possibility that home prices could go down.
To bet against that unending rise was crazy. The unending, upward march of U.S. home prices was an unquestioned and foregone conclusion: until it wasn’t.
The three lessons I’ve taken from studying sacred cows in public, financial markets are:
- All the margin is in hunting sacred cows. It was only by hunting sacred cows that these guys made a ton of money. If investors had believed that it was possible for home prices to go down, the bubble would have never existed and they couldn’t have made any money off of it. You only make money as an active investor if you’re right when everyone else is wrong.
- The more sacred the cow, the fatter the margins. “Home prices can never go down” was REALLY sacred and the margins were really BIG. Scion Capital, one of the hedge funds shorting the market, returned 476% during the crisis.
- Sacred cow hunters often feel like they’re crazy. One of the astounding aspects of Lewis’s account of the financial collapse is how neurotic and freaked out the group shorting the market are. Even as the market starts to collapse and these guys realize they are about to make more money than God, they are freaking out. They’re wondering if they are the suckers and someone knows something they don’t. Everyone around them continues saying “there’s no way housing prices will fall”, even as they’re falling.
This is tough because most of the time when people look at you like you’re crazy, you actually are. If everyone is driving one way on a street, you should probably drive that way too.
The way you figure it out, I think, is taking a moment to determine whether or not you have some sort of “unfair advantage.” In many cases, this seems to be an informational advantage. In the case of the guys in The Big Short, they were the only ones that had actually read the mortgage agreements. They had met Mexican farmers earning twenty four thousand dollars per year who had been given mortgages on $750k homes. No one else that owned the securities that consisted of those mortgages had actually read what was in them or met the people who were taking out the mortgages.
How sacred cow hunting applies to you
The sacred cow I have been hunting for the past few years is in the job market. “Jobs are safe and smart and entrepreneurship is risky and stupid” is a sacred cow. It is beyond question and criticism in our culture.
I sometimes refer to my book, The End of Jobs as a “career investment thesis” in the same way that U.S. home prices being inflated was the investment thesis of Scion Capital. While the view I advance in it is perceived as crazy by “mainstream standards,” I don’t know anyone who has seen all the data that I have and come to a different conclusion. If more than a few investors had actually taken the time to read the paperwork or meet the mortgage holders, we might not have had a subprime crisis.
The people who think it’s crazy usually hear the premise (jobs are ending) and say “that’s stupid, that’ll never happen.” They don’t investigate it. It’s a sacred cow for them.
This is not to say that I am necessarily right and that every sacred cow is necessarily wrong. Most sacred cows are probably true. Just like 99% of the sounds you hear in deer hunting aren’t actually deer, the payoff for the 1% of time you’re right is so great that it’s worth intensely observing and questioning.
This is just as applicable in careers and companies. I worked with a B2B company that sold hospitality equipment. A big part of the reason that the business was successful was because it killed a sacred cow. When the company started a decade ago, no one had ever bought a product in their industry online. People bought through distributors or at trade shows, but not online. The company was able to bring the industry online and reap the profits.
What’s perhaps notable is that the company was quite successful and it wasn’t even that big of a sacred cow. It certainly didn’t seem obvious at the time, but the trend was pretty clear. More people are buying more stuff on the internet. However in the memory of the other companies in the industry, no one had ever bought equipment on the industry. Until they did.
Any business with prospects for long-term success is hunting some sacred cow. That’s not to say hunting a sacred cow guarantees success, it’s just one necessary precondition.
The first time is the hardest
“If you would be a real seeker after truth, it is necessary that at least once in your life you doubt, as far as possible, all things”. – René Descartes
The first time you try to hunt a sacred cow is the hardest. Prior to this moment, you didn’t even know there was such a thing as sacred cows. There was simply the capital T–Truth, and nothing else.
A 2015 article in The New Yorker reveals the inner psychology of someone who is trying to kill a sacred cow for the first time ever. It chronicled the experience of Megan Phelps Roper, a young woman’s decision to leave the Westboro Baptist Church – the church that frequently makes the news by doing things like protesting soldiers’ funerals and applauding famines as the punishment of God on sinners.
This section gets at it:
The next day, [Megan Phelps Roper] mentioned the possibility of leaving [Westboro Baptist Church] to [her sister] Grace. Grace was horrified. “It just sounded ridiculous to even suggest it,” Grace told me. “These were the points I brought up: we’re never going to see our families again, we’re going to go to Hell for eternity, and our life will be meaningless.
But Roper had reached some questions that ate away at her as much or more than all those possibilities:
“Does it really make you happy when you hear about people dying or starving or being maimed? Do you really want to ask God to hurt people? I ask myself these questions. I think the answer is no. When I’m not scared of the answer, I know the answer is no.”
In this case, Megan’s sacred cow was literally sacred. You can see her struggling to grasp a worldview other than the one she was raised with.
The vast majority of people never even make it to this step of questioning. Most people never lace up their shoes and climb into the tree stand, much less listen for the crack of a fallen branch. To go sacred cow hunting is to admit that at least some portion of your beliefs might be wrong.
There are probably many ways to kill your first sacred sacred cow, but the three most common weapons are:
- Travel – You think you’re going on a vacation and you accidentally get deep enough into another culture to realize that people with an entirely different worldview have lived, successfully, on this planet for millennia. To quote Mark Twain, “Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.”
- Books – A friend recently sent me this comment about one of his favorite books – Catch-22 by Joseph Heller:
“Until I read this as a teenager, my attempts to understand the world were handicapped by a fairly naive assumption I was making: all of this must make sense, even if it doesn’t make sense to me. In fact, ‘that’s absurd’ is about as decent an initial evaluation of an institutional reality as ‘that’s brilliant.’ It was wonderfully freeing to be able to laugh at the world in its current incarnation and proceed from there.”
- “Black Swan” Events – I borrow the term ‘Black Swans’ from Nassim Taleb’s influential book of the same name. A Black Swan can be defined as any hugely impactful event that was unprecedented and unexpected at the point in time it occurred.
It could be negative like losing a loved one, 9/11 or a financial collapse. There were very few people who had lost a family member in the World Trade Towers who didn’t start to question a lot of previously sacred assumptions afterward. It could also be positive, like someone who receives an unexpected outpouring of support on a project.
The sacred cow paradox
“Only the Paranoid Survive” – Andy Grove, former-CEO Intel
In The Organization Man, William Whyte surveyed company executives and found they all agreed on two things:
- There were certain to be recessions, depressions, and reorganizations of society which would massively disrupt industries and careers.
- That they, in particular, were definitely immune to the aforementioned issues.
“Whatever their occupation, almost all organization people feel their particular job is depression-proof,” Whyte writes.
You can almost hear their inner dialogue: “Whew, it’s just all those other stupid people who will confront unforeseen problems in their life. Not me, I’ve got it all figured out.”
Author Philip Tetlock interviewed 284 people who made their living “commenting or offering advice on political and economic trends.” They were asked to assess the probabilities that certain events would occur in the not too distant future.
“Those who know more forecast very slightly better than those who know less. But those with the most knowledge are often less reliable. The reason is that the person who acquires more knowledge develops an enhanced illusion of her skill and becomes unrealistically overconfident.”
The more confident the pundit or forecaster was about their prediction, the more likely they were to be wrong. They were more likely to leave their sacred cows unquestioned.
If we imagine two executive in Whyte’s study, one who was certain that their career would be unaffected and the other who thought it could be disrupted, there’s a bit of irony.
The first executive, who is very confident and feels very safe and secure in their career, is actually the most at risk. He has no liability plans, backups or other alternatives.
The other executive, representing the minority who felt their career might be impacted (who would be much more nervous and insecure on a day-to-day basis) is actually in a much stronger position. They would have relationships with people in other industries. They would focus on developing easily transferable skillsets.
If they were an excellent public speaker and spokesperson for a steel company, it wouldn’t matter if the steel industry collapsed, they could move to sunscreen.
A little bit of success is the most dangerous amount
After your first successful hunt, you’ll likely think you’re out of the weeds. However, your first kill is not an escape from danger; rather, it only leads to new ones.
Often, when people have a little bit of success from killing their first sacred cow, they merely escape one sacred order to set up a new one.
They go from worshipping the corner office to worshipping entrepreneurship. A new sacred cow is born. Now, they look down at all the people who haven’t yet killed that particular sacred cow and sell them ammunition in the form of $1,997 information products. Most of this ammunition is blanks.
However, the people that I admire are those who approach sacred cow hunting as an infinite game, a game which cannot be finished, but is won by continual play. To be a true hunter of sacred cows is to accept that you are playing a game which cannot be won in any definite sense. We must accept that the hunt can only be undertaken anew.
The Curse of the Nobel might be the most prominent example. To win a Nobel Prize, you have to kill a sacred cow. You have to move forward a field in some fundamental way that disproves something previously held above question. This would indicate a tremendous hunting ability and yet very few nobel prize winners go on to make another significant contribution to their field. They live off the first kill.
Richard Hamming recounts his experience observing Nobel Prize winners at Bell Labs during it’s heyday:
“…If you do some good work you will find yourself on all kinds of committees and unable to do any more work. You may find yourself as I saw [Walter] Brattain when he got a Nobel Prize. The day the prize was announced we all assembled in Arnold Auditorium; all three winners got up and made speeches. The third one, Brattain, practically with tears in his eyes, said, `I know about this Nobel-Prize effect and I am not going to let it affect me; I am going to remain good old Walter Brattain.’ Well I said to myself, “That is nice.” But in a few weeks I saw it was affecting him. Now he could only work on great problems.
After winning the 1965 Nobel Prize in Physics Richard P. Feynman received a letter from Dr. George Beadle at the University of Chicago offering him an honorary degree.
This was his reply:
Yours is the first honorary degree that I have been offered, and I thank you for considering me for such an honor.
However, I remember the work I did to get a real degree at Princeton and the guys on the same platform receiving honorary degrees without work—and felt an “honorary degree” was a debasement of the idea of a “degree which confirms certain work has been accomplished.” It is like giving an “honorary electrician’s license.” I swore then that if by chance I was ever offered one I would not accept it.
Now at last (twenty-five years later) you have given me a chance to carry out my vow.
So thank you, but I do not wish to accept the honorary degree you offered.
Richard P. Feynman
Offered a token of prestige to commemorate his slaying of a sacred cow, Feynman declined.
He went back to the hunt.
He had spent years sitting in his stand, waiting patiently, observing carefully to see the prey which no other physicist could see. He killed a trophy bull. He dressed it and celebrated briefly, but instead of going around recounting the hunt to his friends, instead of mounting the head and staring at it in his living room, he went back to the hunt.
After winning the Nobel Prize in physics, Feynman went on to make significant contribution to quantum computing and nanotechnology.
It seems hard to overstate how difficult this is to do, mostly for the status reasons Hamming cites. You must go back to the hunt knowing you may never kill the same size bull, a thought that causes many hunters to stay at home.
When everyone wants to tell you how great you are, it is hard to return to the task which got you there in the first place. That is the hard work of hunting your sacred cows. Once you kill the trophy bull, you have to climb back into the stand and just sit.
There is a force trying to prevent you from doing your best work, and it starts to whisper in your ear:
What’s wrong, you killed that big bull a week ago and now, nothing?
You’re just sitting in the tree?
You won the Nobel Prize and now you’re working on that?
You got a great job and now you’re quitting to do that?
You built and sold a business and now you’re doing that?
I’m doing what the hunter must. I am returning to the hunt. To sitting in the stand and waiting, observing, hunting.
There is a Zen proverb: “Before enlightenment, chop wood, carry water. After enlightenment, chop wood, carry water.”
Before success, hunt your sacred cows. After success, hunt your sacred cows.
It is a Sisyphean task; to kill one sacred cow is to necessarily birth another.
If you’ve had a big win lately, a breakthrough, you should celebrate it. Invite your friends over for brisket and beer.
But tomorrow, you must return to the hunt. The prey, now slain, fertilizes the field and allows another to be born. You will be wrong 99% of the time. It will be an oak bough cracking under the weight of an ice storm. You must again return to the field, climb into the stand, and watch the treeline for the telltale signs of movement.
Return to the hunt. A sacred cow yet remains.
Did you like this essay?
If you would like to learn more about why entrepreneurship will be the least riskiest career of the 21st century, you can download a free chapter from my Amazon Bestseller The End Of Jobs.
Read the Free Chapter: ‘Welcome to Extremistan. Don’t Be a Turkey’, and find out why Entrepreneurship may actually be the safest career choice for the new economy.
Thanks to Elisa Doucette, Julian Reynoso, Ron Davison, Erghest Xheblati, Douglas Spence and Jill Thompson for research help on this piece.