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Tragic optimism, as discussed in the podcast, emphasizes the importance of maintaining a hopeful yet realistic mindset in the face of life's challenges. It originated from Victor Frankel's concept, highlighting that humans inevitably face tragedy, pain, and impermanence. Unlike toxic positivity or nihilism, tragic optimism allows individuals to acknowledge the hardships while retaining a positive outlook. By embracing both tragic and optimistic perspectives simultaneously, individuals can navigate difficulties without succumbing to extremes, enabling them to approach life with resilience and a full emotional experience.