When I saw this research paper, it attracted me like a headline on CNN News. It had a catchy headline. The decade-old paper by Baumeister, Bratslavsky, Finkenauer and Vohs goes about explaining how life is full of bad and good instances and how bad was predictive, underestimated, more lasting, more pervasive, elicited more processing, got more attention, was more unusual, was connected to speedy decision making, universal and simply stronger than the good.
The 50-page document had made a compelling case to justify its headline. The more I thought about it, the more I could confirm that the authors were correct. My unfortunate no satellite dish, just cable situation forced me to watch more news at the guest apartment in Budapest. Everything else from Bruce Willis to football had a Hungarian voice. And, I am sure even with subtitles, the bad would not have become weaker.
And, what was I watching, more bad news, starting from Syria, to Malala, to Rajat, to Lance, to hurricane Sandy. And, just like the authors mentioned, bad interested the society more than the good.
The few good things seemed to be the good life ads interspersed between the bad news. So, on one side we had a bad attention seeking stronger reality and on the other we had businesses sweetening it up with good life in a Hyundai car, remarkable Indonesia, Qatar foundations and other positive messages. Reality was a bad memory, which we were letting the positive ads erase. Life was like full of bad memories, which we systematically erase to stay positive.
The paper lists a series of instances. The long-term success of a relationship depended more on not doing bad things rather than on doing good things. Bad reputations were easy to acquire but difficult to lose, whereas good reputations were difficult to acquire but easy to lose. The overall goodness of a person was determined mostly by his worst bad deed, with good deeds having lesser influence. Even pessimism, not optimism, uniquely predicted psychological and physical health outcomes. The universality of stronger bad over weaker good was unequivocal.
The strength of bad was also visible in the stock markets. Investors attached more weightage to a loss than to a gain. This was the reason for risk aversion. This was also the reason why there were more momentum investors tracking winners, compared to contrarian bets looking at depressed losers.
The paper explains how trauma has no true opposite concept. Unlike many good experiences, a single traumatic experience can have long-term effects on the person's health, well-being, attitudes, self-esteem, anxiety, and behaviour. Ability to feel pain has served humans well on both a personal and an evolutionary level. People, who fail to feel pain, fail to adapt and die early. People who write about their most traumatic experiences typically show significant improvements in physical health, as compared with the control group. Market panics also have an ability to inflict a generational pain, which create new financial habits.
How we handle a bad event, loss, pain, subconsciously or consciously, is our choice. If we are conscious about it, we might learn more from losses than gains. We might embrace the bad worst losers more than the fast shinning "good" winners. In the end we have a psychological framework that keeps us alive, but it's our only conscious decision making that can not only create wealth but also keep us good, while we enjoy it.
The author is CMT and Founder, Orpheus CAPITALS, a global alternative research firm
