A couple of months back, Bryan Caplan had written:
1. Jet lag. What’s the best way to cope with jet lag? Most people sleep on the plane, then gradually adjust to the local time once they reach their destination. The problem: It often takes a week for people to get a decent night’s sleep. By the time they’re feeling themselves again, they’re almost ready to go home.
My alternative: Do not sleep on the plane. At all. When you arrive, do not sleep – at all – until a locally normal bedtime. Pay the fixed cost without cheating. When you wake up eight to ten hours later, you will be refreshed and in sync with your new time zone. In exchange for less than a day of sleep deprivation, you will feel fine for the rest of your trip.
So I decided to practically test out his advice. When I was flying in to New York over the weekend, I took a conscious decision to not sleep on the flight beyond 7 am New York time. It was hard, and I had to watch drivel such as Sankat City in order to keep myself awake, but after a day of work in New York, I think it is working well. It’s hardly 10pm and I’m feeling insanely sleepy now but I suppose this can be classified as “normal” sleeping time itself.
I also saw Kaminey on the flight. Extremely well-made movie, and the lack of length helps. And I finished reading Jonathan Wilson’s Inverting the Pyramid also during the flight.
New York city is insanely cold, and windy! It is ar eally scary experience wehn the wind hits your face, and there is the chance that your nose might just break and fall off ! When i had gone for dinner last night, I ended up running backwards! Only to save my face from being hit by the wind. Thankfully today the weather was better and I managed to roam for a bit after work.
I hope to update this blog more frequently while I’m here in New York. And doo read all of Bryan Caplan’s article.
The basic idea of this post is that interpersonal relationships (not necessarily romantic) need to be treated as balance sheets and not as P&L statements, i.e. one should always judge based on the overall all-time aggregate rather than the last incremental change in situation.
Just to give you a quick overview of accounting, the annual statement typically has two major components – the P&L statement which reflects what happened between the last release of the statement and the currrent point, and the balance sheet which reflects the position of the company at the point of time of release of the statement.
I think Bryan Caplan had made this point in one of his posts, but I’m not able to find it and hence not able to link it. The point is that you should look at relationships on a wholesome basis, and not just judge it based on the last action. The whole point is that there is volatility (what we refer to in my office as “the dW term”) and so there are obviously going to be time periods during which you record a loss. And if on each of these occasions you were to take your next course of action based on this loss alone, you are likely to be the loser.
I’m not saying that you should ignore the loss-making periods and just move on. You do need to introspect and figure out what you need to do in the next accounting period in order to prevent this kind of a loss from repeating. You will need to “work the loss”, not make a judgment to break the relationship based on it. I think a large part of the problems in this world (yeah, here goes another grand plan) stems from people using one-period losses in order to take judgments on relationships.
Another thing is not to generate the accounting statements on a shorter time period. This is similar to one funda I’d put long ago about how you shouldn’t review your investments at extremely short intervals since that will lead to a domination of the volatility term (dW) and thus cause unnecessary headache. You might notice that corporates rarely release their accounts statements more frequently than once a quarter – this has more to do with volatility than with the difficulty in generating these statements.It is similar in the case of interpersonal relationships. Don’t judge too often – the noise term will end up dominating.
One caveat though – very occasionally the last loss may be so bad that it more than wipes out the balance sheet and takes to zero (or even less) the value of the firm. In that kind of a situation, there is no option but to shut down the firm (or break the relationship) and move on. Once again, however, the clincher in the decision to break up has to be the balance sheet which has gone to zero (or negative) and not just simply the magnitude of the last loss.
Life based on a balance sheet view is a balanced life.