 Let's talk about the deprival superreaction tendency also known as loss aversion Now if I was to give you $10, right? You'd be pretty happy But if you were to lose $10 You'll be pretty pissed off the magnitude of your happiness from the $10 gain is not equal to the $10 loss The magnitude of the $10 loss is far greater than gaining $10. This is loss aversion Even in a scenario where let's say your salary is increased Let's say your base salary is something like $50,000 a year We boost up your salary. We double it to $100,000. You'd be fairly happy. You'd be over the moon, right? But let's say the economic situation of the world is not going to well and we're gonna have to cut your pay down to $75,000 a year now $75,000 is still a net gain of $25,000 above what you previously had But the loss would disappoint you greatly far more than the gain of $50,000 once again This is loss aversion We tend to put greater Acknowledgement to losses and gains Now the reason why we do this could be simply put from an evolutionary standpoint people Like being where they are they like being the state of whom your stasis So if you lose something is threatening your well-being if you gain something to added benefit losing something is threatening your situation. So if you're a caveman and Another caveman steals one of your wives or something like that This could be detrimental to you. This is not going to help your survival This is not going to help your kids But if you were to gain another wife when you already have to it doesn't really Change much. It just is added bonus So that's where this stems from Now this also is the reason why gambling is so successful Why casinos make a lot of money from gambling if you're gambling and you lose your money You feel obliged to keep playing to regain your money Even though logically there is no way that the odds are gonna be in your favor The odds are still the same but because you lost $100 you really want to play more until you break even so that's how gambling Functions and that's how a lot of people have made a lot of money off gambling through using this cognitive bias That's embedded in our minds. This is also seen as stock market. I'm sure if you study economics You understand about a bull in a bear market a Bull market is when the stocks are rising and everyone's just buying Everyone is in the healer moment get ready to make some money at bear markets when the stocks are going down and Everyone is running away. This is when the loss of version is really doing some damage Because everyone is selling Because the stocks are going down. No one wants to lose what they have This is generally the best time to actually buy stocks Warren Buffett is quite who's saying Buy when there is blood in the streets because he understands the cognitive bias of loss aversion of how people make illogical decisions when they start losing money when they start losing their standings So understand this cognitive bias and you'll be better off. I hope you enjoy that Just do it