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Do you ever wonder why a stock goes up with a company announces layoffs? Or why a stock goes down after a company wins a huge contract?

It’s because we don’t judge events purely by what happened. Rather, we look at what happened relative to our expectations.

If a company makes a million dollars in a year, but Wall Street was expecting two million, nobody says, “Congratulations.” The company just came in at half of what was expected. Similarly, if a company only loses a million and Wall Street was expecting it to lose more than that, it’s pats on the back all around.

This is true of life, too.

Not knowing expectations is operating blindly.

It’s why a teenager who gets a new cheapo car acts disappointed. Well sure: A new car is great if you expected no car at all. But, if the car is lesser than what was expected, it’s a disappointment.

The great thing is: You can manage your own expectations and manage other people’s expectations of yourself.

If you find yourself grossly disappointed with some aspect of your life, take a moment to examine what your expectations were. And were they realistic to begin with?

Marriage is one big practice in managing expectations. If you expect it to make your life whole and complete and rainbows and peace signs, you’ll be wholly disappointed. On the flip side, you should expect basic things such as teamwork, respect and emotional support.

Most of politics seems to be a debate over expectations of the role of government.

I’m fascinated by parenting and happiness studies. Namely, I’ve learned that parenting does not equal day-to-day happiness. But it can produce a sense of accomplishment on a longer timeline.

I think that families should set their expectations this way: Family life will be 90% draining and 10% rewarding joy. (For example, how could changing a diaper or driving all over creation to run errands possibly ever be awesome? No, it’s something you lovingly do because you want your child to be clean and healthy.)

If during some three-month period Mr. Smith (fictitious guy) is happy 15% of the time and stressed out and frazzled 85% of the time, he can say that his home life exceeded his expectations.

And then he can declare to family and friends in his quarterly update: Our car broke down, the dishwasher stopped working, and lil Suzie’s got the flu. But that met expectations. On the upside, no one threw up on the floor, our dog didn’t destroy any shoes and we all got to go on one nice walk in the sunshine. Net/net: It was a positive quarter in the Smith household.

As for work life: It’s best not to ponder whether your job is meeting your expectations. Rather, think about how you can exceed others’ expectations. And then see if the reward is mutual.

If anyone finds that this works, please let me know. I’m either a genius or hopelessly naive. =P