Deprival-Superreaction Tendency

Deprival-Superreaction Tendency refers to the human reactions to the experience of loss — both the loss of something one already possesses as well as the loss of something that one has almost obtained. Human beings feel the pain of loss much more intensely than the pleasure of an equivalent gain and there are important consequences stemming from this tendency. This article is part of a series on Charlie Munger’s Psychology of Human Misjudgment.

Berkshire Hathaway’s Great Transformation

On a spring day in 1964, Warren Buffett received a letter from Seabury Stanton offering to purchase the Buffett Partnership’s stake in Berkshire Hathaway. Buffett and Stanton had agreed to a price of $11.50 but Stanton’s letter offered only $11.375. This annoyed the thirty-three year old Buffett and he started buying more shares starting his long journey of transforming Berkshire Hathaway into what it is today.

The Buffalo News: From Butler to Buffett

From Butler to Buffett provides a great example of the evolution of newspapers from the late nineteenth century up through the consolidation of the industry that was largely complete a hundred years later. Murray Light provides a fascinating account of how the paper transformed from a scrappy startup founded in 1873 into the only surviving newspaper in the city 110 years later following Buffett’s acquisition of the paper.

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