The Pain of Losing

Here’s an interesting paradox that some of you may be familiar with.

On Monday when the Australian stock market took a dive I lost around $5,000 in one day, yet barely gave it a moment’s thought, accepting it as part of the frequent rises and falls that go with share trading. Yet when I lost 7 bucks – Seven. Lousy. Bucks. – playing poker on the micro-tables last night, I spent the rest of the night muttering and cursing, despising myself for some of the insane calls I made, reliving hand after hand, pissed off at the prick who played 89o and beat my set when he hit his straight on the river.

How does that work???

There are a few obvious reasons for the difference in my reaction (apart the fact that I’m just plain weird) to the two situations but logically they should be same. Why?

• There is a known risk of loss when entering both transactions.
• There a ways and means of minimising your losses in both cases – setting stop losses for the market, limiting yourself to a certain buy-in, for example.

But I think the main reason that I tool the poker loss so much harder was that I’d had so many winning sessions in a row that I simply wasn’t conditioned to accept a loss. My mind had conveniently overlooked the probability that, every now and then, the cards simply won’t fall your way and the money will move from your account to someone who is infinitely less deserving.