The Negative Utility of Losses

At present I’m privileged to be working with twenty-eight hard working people who just completed a year-long teaching internship. Beginning teachers typically fall into a common psychological trap. Hell, what am I saying, I still do it too and I’ve been at it for a quarter century. All but the most callused teachers fall into the trap of letting a few negative student encounters shade one’s thinking about an entire class or course.

For example, when I think about my sixteen writing students last semester, I know at least twelve learned a lot, improved, and had a positive experience. One to four, probably not so much. One of my current students is the mother of one of my first year spring semester writing students. She confided in me that her daughter said, “He doesn’t like the way I write.” Insert knife. Twist. I really work hard to help students develop more positive attitudes towards writing and to develop self confidence so that really bummed me out. Then my thought process becomes, “Nevermind loser that the majority of the class had a positive experience, a few didn’t.”

Why is it that you can have a neutral or positive working relationship with nine students, but the negative one with the tenth takes away from the entire teaching and learning experience?

I was wondering this while reading The Investor’s Manifesto by William Bernstein, page 108 specifically. He writes, “It makes little sense that we should care about a bad day or a bad year in the stock market if it provides us with good long-term returns. But because of the importance of our limbic systems, we care—very, very much—about short term losses. We cannot help it: That is the way we are hardwired. Behavioral studies show that, in emotional terms, a loss of $1 approximately offsets a gain of $2; in the unlovely language of economics, the negative utility of losses is twice that of the positive utility of gains.”

Or five or ten times that depending on how negative the teacher-student relationship.

Conceptual convergence. I love the phrase “the negative utility of losses” because it helps me better describe the abstract psychological (or actually biological) phenomenon that plagues most teachers.

My natural tendency would be to strategize on how to combat negative utility of loss thinking, but if it’s biological is it inevitable? Is resistance futile?

Woods, Nicklaus, the Globalization of Sports

The world is most passionate about futbol, the Canucks are hockey-crazed, and in the U.S. we’ve always staked our claim to baseball, basketball, and football. Then global interdependence accelerated and now we get spanked in international baseball competitions, the bigs are a multinational polyglot, our days of bball dominance are a thing of the past, and only football remains predominantly national in orientation.

One especially poignant event took place in 2000 that illustrates the globalization of professional sports. The Dallas Mavericks had five international players on the court at the same time—Obinna Ekezie (Nigeria); Eduardo Najera (Mexico); Steve Nash (Canaduh), Dirk Nowitzki (Germany); and Zhizhi Wang (China). If you need more evidence, check out an LPGA leaderboard.

Speaking of golf, TW is known around the world as a result of his amazing on course success, endless advertising, and sexcapades. Some in the media have reported that his Swedish wife is seeking $750 million (which will only worsen our balance of trade). Until recently, I would have bet 100% of my retirement assets that TW would break Jack’s major championship record. TW sits at 14, JN has 18. Now, I’d only bet 70%.

To win a major championship, I assume the following. You have to be play really well for four consecutive rounds. To do that, you must have your swing grooved going in, be mentally focused, and injury free (TW’s US Open win at Torrey was a freakish anomaly). Pre-sexcapade-escalade-firehydrant, TW usually had his swing grooved going into majors, was always off the charts focused, and usually healthy (pre-knee problem).

Times have changed. Hard to focus on the eight footer for par with 18″ of break when you’re wondering if your wife has discovered your most recent sexts. Then there’s the neck injury. Then there’s the swing coach that decided he wanted a divorce too.

All of those things can be fixed over time. After the divorce he’ll sleep around worry-free, his neck will probably return to normal, and eventually he’ll probably get someone to take seven figures to help with his swing.

Tiger is 34 years old and Watson almost won the British last year at 59. Apart from Gary Player, has there ever been a golfer more dedicated to fitness than TW? So let’s say his window is between 15 and 25 years. All he’d have to do to pass Jack is win one major every 3 to 5 years. Assuming he plays every major every year that’s winning one of twelve or twenty championships.

But globalization is the variable that gives me pause. As of May 31st, 2010, thirty-three of the top fifty golfers in the world are international players—66% (I did that in my head). Several of the top international players are considerably younger than Tiger, just as long, and nearly as talented—McIlroy, Kaymer, Schwartzel, Villegas, Ishikawa, Davies. As a result of the globalization of golf, Tiger faces increasingly deep fields, much more so than Nicklaus did. I wish I had a research assistant to dig into the comparable world ranking figures for Nicklaus when he was in his mid-30’s. I’m guessing the number of international players in the top 50, and the non-Gary Player major championship winners, paled by comparison.

There’s also anecdotal evidence that the next generation of golfers is going to be better than the current one. Jordan Spieth, a 16 year old, finished 16th in a PGA tour event two weeks ago. Last week he finished tied for 8th in a junior golf tournament, 9 strokes behind Anthony Paolucci (66-69-69).

Then there’s a non-globalization, psychological factor. Over the last ten years, nearly everyone nearly always has been intimidated by Tiger, wilting under the pressure of playing in his shadow. Now, not as much. Can he get back to the same level of physical and mental dominance? Possibly.

And that’s why I’m only putting 70% of my retirement assets on Tiger winning five or more majors.

Cutest Kid in Todo El Mundo

Great time last weekend in Frenchtown-Missoula, MT. What an honor to be my nephew’s son’s godparent. The labrador promised to stand guard in my absence. Not just the cutest baby in the world, but the happiest. Smiled at everyone including me when I trashtalked him, “Even I’ve got more hair than you.” Right now he’s on his first cross-country plane trip. If that’s not daunting enough, once he arrives, grandma and great grandma will be fighting over him. I also enjoyed swapping stories with his mom and dad. Here’s some of what I learned. Dad was wild in middle school, high school, and a good part of college. The new Pittsburgh Stealers (2006 Superbowl) tat is nice, excellent coloring, the text could be larger though. There are too many wolves in MT at least from the hunters’ perspective. The speed limit is 75mph in Big Sky Country, but I will drive faster the next time I’m there because people are extremely lax about drunk driving. Coincidentally, the vast majority of medicinal marijuana card holders are 20-24 years old, that is a stressful period with job searches and all. Kid you not, in downtown Missoula at least, out of respect to the transgendered, you’re now free to use the men’s or women’s bathrooms. Downtown Missoula, liberal bastion; the rest of MT, right wing nut jobs; no in between.
The Godson and the Labrador

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