Downside risk

What the heck is going on here?  I leave the country for a few days and all hell breaks loose.

Last Wednesday I crossed the border into Canada for a few days of fishing.  At the time the Twins still had a pulse (admittedly a very faint one), the United States a AAA credit rating and the Dow was above 12,000.  Now the baseball team has had it's final coffin nail pounded, treasury bonds are about as reliable as the Seahawks QB situation and the economy is a shambles.  But hey, you still had a better weekend than Rhett Bomar.

A weekend of fishing, drinking and, most importantly card playing, reminded me once again of the power of expectations.  I've said it before, and I'll say it again, bad results can be good, and good results bad, depending on what you were expecting going in.  Many games of cribbage were played during the past few days, at $5 a pop.  For those of you unfamiliar with the scoring, a game goes to 120 points, if you fail to score 90, the amount you owe is doubled, and failing to reach 60 points means a $15 hit.  Several games started off extremely poorly, raising the spectre of doubling or tripling the amount lost.  When that occurred, I was quite happy to make a late push past 90, losing big, but still only losing the $5 minimum.  Naturally, this made me think of Tim Brewster, the all-time king of meaningless late scores to make ugly losses more palatable.

Brew was a perfect example of what happens when you serve hambugers after telling people they're going to get filet mignon  Said burgers might be tasty enough to a starving man (read: Gopher football fan), but will always end in disappointment when steak was on the menu.  As we close the book on our high-expectations squad (Twins), in favor of a couple who's bar will be decidedly lower (Vikings, Gophers), I'm reminded that it's not always bad to be bad.  Sure there are a few consistent homers out there trying to push the best case scenario, but in general things are nice and calm.  The bandwagon is emptier these days, but the company is better and you can stretch out a bit.  Teams in rebuilding mode cause you to accentuate the positive, seeing something done right is a refreshing change from the standard rule of failure.  Teams with championship aspirations draw more eyes, and the associated scrutiny, with every misstep being picked apart until you're not even sure if your good team is good anymore.

In a broader context, take the recent economy.  People get upset about the stock market dropping because it harms their wealth, and likely causes concerns about their retirement.  But if you recalibrate your expectations, and simply assume you'll be working until the day you drop dead, then a 20% drop in your 401k isn't really a big deal.  Marketing research shows that people respond more favorably to the removal of negative stimuli than they do to the introduction of a positive one.  In other words, they're more likely to buy a $90 item that you tell them will be going up $10 in the near future than a $100 item on sale for $10 off.  The price may be the same, but the expectations drive different behavior.  The expect failure, deal with success mantra can sometimes be the best way to approach life.

In other words, the Vikings are going to lose $5 this season, but maybe, if they're lucky, they can avoid dropping $10 or $15.

And with that thought, Happy Monday :)