Grit

About a year and a half into my freshly minted trading career, I was on the verge of blowing up yet another account. Dismayed, I thought I lacked the skills needed to become a great trader. That is, until I was fortunate enough to come across a lecture by Professor Angela Lee Duckworth who shattered my preconceived notions on success.

 

A professor of psychology at the University of Pennsylvania, Prof. Duckworth investigated what type of person succeeded in the most challenging settings and why. Her studies showed that “1 characteristic emerged as the most significant predictor of success. It wasn’t social intelligence, good looks, physical health or IQ.”

“It was Grit.”

So what is Grit?

She describes it as

  1. Sustained Passion (the ability to not be distracted by new ideas or passions) coupled with
  2. Perseverance (the ability to not be discouraged from setbacks and to finish what you started).

I thought I lacked talent. But Prof. Duckworth states that talent and success are inversely related. The more natural talent you had, the lower your rate of success. She proves this with her study on The National Spelling Bee.

 

The National Spelling Bee

Everyone thinks you need to be a genius to win in the Spelling Bee. But Prof. Duckworth says that’s wrong. Surveying 175 finalists in the 2005 National Spelling Bee, the children were subjected to

  1. A verbal IQ test and
  2. A Grit Measuring Survey

At the end of the competition, the scores of the two tests were compared with how far they advanced. The results were astonishing.

Results taken from "Grit: Perseverance and Passion for Long-Term Goals" by Angela L. Duckworth and Christopher Peterson

From the graph above we see that as expected, the bottom 25% with the lowest IQ (Quartile 1) performed the poorest. But surprisingly we see a dip in performance from the top 25% (Quartile 4), proving IQ was not the best factor in predicting final placement. 

But the darkest line measuring Grit shows a proportional relationship to performance. Those found to be grittiest headed to the farthest rounds. And additionally, those with the most Grit did not score the highest IQ.


When asked about how they studied, the grittiest students said they spent up to 30 hours a week. But their energy was focused on words they did NOT know, passing over on the easy ones. They isolated their weaknesses and made strides to eliminate them.

This is high achievement behavior.

This is grit.

 

We as traders have much we can learn from children like this. A former colleague of mine once said that after 10,000 hours of chart staring, he would become rich. But grit says otherwise. Mindless staring and repetition won't get you anywhere. Constant passion for improvement and weakness eradication is what will lead us to success.

 

I no longer desire to become talented at navigating the stock market. Instead, I now focus on grit.


All research and statistics have been referenced from the publication of Grit: Perseverance and Passion for Long-Term Goals by Angela L. Duckworth and Christopher Peterson.

For more on Prof. Duckworth's talk on Grit you can find it here.