Teenagers have a wonderful expression: being owned.

This week I was owned. Badly. The case has been reported so not only will my loss hurt financially but the wider commercial community will get to enjoy the spectacle. My humiliation is especially elegant because it was unexpected, was partly as a result of my own failure and it is public.

The case, if you want to Google it, is Grant and Smith against Waipareira Investments. Enjoy.

I feign casual indifference when such things happen, but that's nonsense. Defeat hurts. It hurts more than the pleasure of winning.


Had Team New Zealand won that elusive ninth race in San Francisco the delight would have been rapturous, yet our pleasure would have been quickly replaced with the mundane details of our lives. The defeat, exquisite and in the face of the ultra-competitive Spithill, cuts much deeper and will endure far longer than the temporary euphoria of the glow of victory. Helpfully, economists have a term for this condition: loss aversion. We enjoy winning a dollar less than we feel the pain of losing a dollar.

Marketers know this and it is why The Warehouse offers a money-back guarantee. Our fear of making a bad purchase is disproportionate to the pleasure of a bargain. Business pundits use it to explain why investors are reluctant to sell stocks that have tanked - selling crystalises the loss and this loss is painful.

For reasons that are unclear and for which economists have no expression, failing in public is especially intense, as anyone who has contemplated doing stand-up comedy will appreciate. Why we fear public failure so deeply is not something I am competent to comment on but it does increase the costs of risk-taking; even if our public is no bigger than our work colleagues.

The real cost, however, is that fear can drive us from whatever arena we choose to compete. Rather than dust ourselves off we retire hurt. One poor investment causes us to abandon the sharemarket, a duplicitous spouse forces us into romantic isolation and being passed over for promotion prevents us from making future applications.

Time is a wonderful balm but a fresh victory is far more effective.

Disengagement is easy when we forget our achievements and dwell on our disasters and, unhelpfully, we have evolved to do just that. Failure, in all its glorious forms, is a reflection of our willingness to compete. Understanding that we are hard-wired to feel deeply the pain of rejection does not dull its agony but is the key to reducing our spell of self-imposed seclusion after each defeat.