Success Is Within Your Control
April 21, 2015
by Dan Solin
David Einhorn's Greenlight Capital returned -2.9% in the second quarter of 2021 compared to 8.5% for the S&P 500. According to a copy of the fund's letter, which ValueWalk has reviewed, longs contributed 5.2% in the quarter while short positions detracted 4.6%. Q2 2021 hedge fund letters, conferences and more Macro positions detracted 3.3% from Read More
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You may be skeptical of the expression, “The harder I work, the luckier I get.” But empirical evidence says it’s true. While we often look with envy at people who get a “lucky break,” the reality is that the vast majority of those people worked long and hard before they achieved success.
There is considerable support for the hypothesis that effort – not just intelligence – correlates directly with success. In an often-cited study, 10- to 11-year-old children were separated into two groups. Both were given mathematical problems to solve. One group was praised for their innate intelligence after completing the task. The other group was praised for their effort in tackling the problems. Both groups were then given a much more difficult set of problems, which went far beyond their ability to solve. Each group was told they hadn’t done as well on the second set as they had on the first. Finally, they were given an easier set of problems. The goal was to determine how failing the second set of problems would affect their performance on the third set.
The study found that children praised for their effort achieved scores 25% higher than those who were told they were “very smart.”
This experiment, and other similar tests performed by the same researchers, demonstrated the value of praising effort rather than innate intelligence. These results have profound implications for advisors striving to succeed; after all, the amount of effort we expend on our tasks is within our control. Innate intelligence is not.
Carol Dweck, a co-author of this study, believes there is a difference in the mindset of successful and unsuccessful people. Successful people have what Dweck terms a “growth mindset.” These people embrace challenges, are eager to learn, persist in the face of adversity, see increased effort as the path to success, learn from criticism and find lessons and inspiration in the success of others. As a consequence, people with this “growth mindset” tend to be high achievers.
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