Wednesday, March 11, 2009

Kuebler-Ross's Five Stages of Grief --Applied to our Rec/Depression

Elizabeth Kuebler-Ross's wrote a famous model of grief involving the five steps below. These have been mischaracterized and popularized. Most notable is the view that "acceptance" is a positive state when it is more like the docile and stoic state on the far side of depression.

Diana Garneck picks up on the more pop notion of the 5-stages with this bridge from the depressing, "Let's buy canned goods and ammo" (see my posting of 7-March) to an realistic & constructive condition.

I have come to think the way to approach death is with your personality still well-integrated with your past self.  In the economic example, we need to stop fretting, and start being realistic. Let's think about the future, and start planning for the two decades it will take to rebuild that 401k. 

Today, I had a business meeting where we talked about our less-than-stellar business results--results that in any normal time would have been shocking. The positive thing is not being shocked and starting to act on what I/we can do to make it better.

Five Stages of Economic Grief -- according to Garneck

Stage 1, Denial: "I should throw away my 401K statement without even opening it." Or, "If we suspend mark to market accounting, everything bad will go away."

Stage 2, Anger: "Why did this happen to me? It is unfair that Wall Street benefited at my expense." Or, "Why the f*ck is AIG's bailout money going to its counterparties like Goldman and Deutsche Bank?"

Stage 3, Bargaining: "Just give me one relief rally and I can make it all back and sell."

Stage 4, Depression: "The market sucks, no one is hiring anywhere. Why should I bother?"

Stage 5, Acceptance: "It's bad but these things don't last forever. I'm going to work on my career and portfolio to be prepared for the opportunities when they do come."