Interesting article. Perhaps more applicable when evaluating portfolios as a whole rather than single investments? Because people have different return expectations, differing ability and willing ness to to take risks, they may go for different portfolios.

The intrinsic value of an investment does not change based on how desperate an investor is (a prisoner collecting a bribe amount to get out sounds pretty desperate). In fact, one might go even so far as to say that while such an investor is acting rationally in the context of his desperation, he isn't "rational" from how a reasonable person (not in duress) would view rationality.

The way I would reconcile is this: Peoples return-risk combinations change based on their own individual situations, however that doesnt impact intrinsic values of individual investment options. It only impacts WHICH OF THOSE OPTIONS make into that individual portfolio.