This topic came from a Medvec study (1995) where they asked Olympic bronze medalists and silver medalists to rate their happiness right after winning their medal, and bronze medalists were routinely happier than silver medalists.
Silver medalists were in a loss frame - they had lost out on the gold. Bronze medalists were in a gain frame - they had won a medal where they could have had none.
The objective gain of a silver medal is higher than a bronze medal, but the subjective gain of a bronze medal was higher than a silver medal for most.
It demonstrates how objective utility and subjective utility are not linear. This is important for investing because it's not as though our subjective gain of a positive return is linearly tied to the objective gain of that positive return. Likewise our subjective loss of a negative return is not necessarily linearly tied to the objective loss of that negative return.
It becomes important to understand your own personal subjective utility curve against different objective outcomes because the psychology of our subjective utility experience can at least inform your analytical reasoning on an investment decision, if not entirely overpower it.
One of the best things about eCommerce businesses is that anyone can start one.
One of the worst things about eCommerce businesses is that anyone can start one.
@WSJ & @aosipovich your 6/7/23 report mentions FINRA's $MMTLP halt due 2 settlement uncertainty. Three crucial questions you didn't address.
1. Where are Next Bridge shares?
2. If the SEC approved final trading days, why did FINRA issue a U-3 halt, given broker/dealers' supposed compliance?
3. What will ticker's blue sheets say? #MMTLP #FINRA
Our recent policy brief stresses the need to claw back compensation for reckless bankers and prohibit compensation arrangements that encourage inappropriate risk taking.
https://t.co/qfVVucYxc1