Baseline Happiness, Apple and Sienna Miller

My friend Brian likes to make himself feel better whenever he sees a hot girl walking down the street or waiting tables in a restaurant we’re eating at or working out at the machine next to him in the gym.  He says to himself (or sometimes out loud) that “no matter how hot she is, somewhere in this city there’s a guy dating her who is just absolutely sick of her.”  It makes him feel better that even though he can’t have her, whoever does have her is totally over it anyway.  Brian is (mysoginistically) hitting on an important concept here about happiness and the trouble with establishing a new baseline happiness of comfort and expectation.

I think shareholders in Apple can probably relate after the week that was.

To recap, after the close Tuesday night Apple severely disappointed The Street by reporting a quarter in which revenue was only 40% higher than Q3 2010, sales only came in $3.3 billion above the company’s own expectation.  Investors reacted by ripping 29 points off the share price over the next three days.  Talk about a hard-to-please group.  On the same night Yahoo shareholders rewarded the company with a 5% jump after they reported an earnings beat so small you’d need an electron microscope to see it.  Yahoo’s shareholders have absolutely zero expectations, they are like hostages bound and gagged in the basement of a North African airport to whom a sip of water is like a swig of ambrosia from the horn of Zeus.

To the left is a picture of Sienna Miller, quite possibly one of the most gorgeous and talented actresses of the aught’s decade.  Had my friend Brian ever happened to hop onto a treadmill next to her at Equinox, his internal monologue would have sounded something like this: “Ohmygod Ohmygod Ohmygod Ohmygod Ohmygod…..but somewhere, there’s a guy who comes home to that every night, and he’s just sick of it.”

And he’d have been right, because Sienna’s husband at the time was the actor Jude Law, who was so “sick of her” that he began sleeping with the overweight nanny who was taking care of their children.

Is it possible for a giant corporation like Apple to grow any faster when we’re talking about a $100 billion annual revenue run-rate.  Obviously not.  Was it humanly possible for Sienna Miller to have become any more desirable and alluring to Jude Law?  Short of magically sprouting an identical twin sister who would also be sexually available to the young man, obviously it was not.

The concept of “baseline happiness” is best exemplified in the everyday person who somehow becomes a lottery winner; lottery winners are always at their happiest on the day they find out they’ve won.  From there, the baseline shifts higher.  Living in luxury and spending the money do not produce a higher level of happiness.  The lotto kings and queens simply adjust and their happiness levels normalize.  Studies have a shown that the happiness levels of someone making $100,000 a year are significantly elevated above the happiness levels of those making only $50,000 – but the difference in baseline happiness between those making $100,000 and $5 million per year is almost imperceptible.

Both Jude Law and Apple’s shareholders have had their baseline happiness adjusted higher and higher, to a point where “happiness” is almost unattainable.  When you’re along for the greatest growth stock ride in history during a time when the overall markets produce nothing for everyone else, you have become spoiled to the point of no return.  And in that frame of mine, a 40% revenue gain should have been 45% and a Q1 2012 product launch should have been a Q4 2011 product launch.

Sienna can hardly do any more crunches and Tim Cook can hardly release any more iPhone iterations to ever keep up with the expectations.  Because the baseline happiness levels are simply too high to hurdle.

Tags: $AAPL $YHOO $SIENNAMILLER