Gratitude By, D.R. Barton, Jr.



“Piglet noticed that even though he had a Very Small Heart,
it could hold a rather large amount of Gratitude.”—A.A. Milne, Winnie-the-Pooh

***Warning — You are about to be issued a personal challenge. As hard as it is to believe — there are traders and investors who read this weekly missive, study Van’s materials, and STILL believe that the psychological aspect of trading isn’t that important.

Here’s my challenge — do the two exercises at the end of this article. If your trading and your experience of life (i.e. your happiness) aren’t significantly enhanced, I’ll personally donate $100 to the charity of your choice. If you knew the size of Van’s newsletter subscriber list, you’d understand how confident I have to be about the usefulness of these exercises! I make this challenge because I’d love to find a way to have a wonderfully positive influence on everyone reading this newsletter as my Thanksgiving gift to you.

My Most Meaningful Experience with Gratitude

Almost 28 years ago, I experienced a day of gratitude that was so special and affected me so deeply that it is still vividly etched in my memory. Our daughter Meg (our firstborn) was only a few months old, and she was being baptized at our church. We had invited friends and family — some traveling great distances. Our pastor graciously allowed me to deliver the message that day. I spoke about God’s love for each of us, a love so deep that it is pursuing us even before we are aware of it (John Wesley called it God’s prevenient grace).

Until that day I had experienced parenting at a perfunctory level — helping with chores like diapers and baths, etc. But it wasn’t until I slowed down and took the time to explain what parenting meant to me, how parenting made me feel and how this little miracle of a girl had changed me and the very way I look at the world that I really understood what it meant to be a dad. The gratitude that I felt for that experience — the awakening to the joy of being a parent — was overwhelming.

So in the spirit of this season of gratitude and thanksgiving, I hope that you find some enjoyable and useful information here!

Thanksgiving Stock Market Returns

Let’s start with some hard numbers so we don’t lose my fellow data geeks out there.

Looking back to the end of WWII (1945), data from Bespoke shows that the market has been up during Thanksgiving week a very strong 75% of the time, with an average gain right around 0.8%.

Although it’s a seasonally strong trading timeframe, there are many distractions that can keep us from being truly thankful. For example, we could argue over whether the first Thanksgiving celebration in the U.S. was attended by pilgrims in Massachusetts, English settlers in Jamestown 15 years earlier, or Spanish explorers in Texas or Florida years before that.

We could also worry about the perfect way to cook the turkey and gravy, or if anyone over the age of 7 will watch the Macy’s Thanksgiving Day parade. And this year during the strongest outbreak of the Coronavirus to date, we have to add to the list staying safe.

Traditionally, Thanksgiving kicks off the holiday season but Christmas ads running for the last four weeks might argue otherwise. This national holiday of thanks reminds us to set aside distractions for a day and point our thoughts toward one of the most useful of all human expressions — gratitude.

We All Know Gratitude Is a Good Thing but… Can We PROVE it?

Robert Emmons is perhaps the world’s most prominent researcher in the study of gratitude. In one of his early papers, he defines gratitude as “a felt sense of wonder, thankfulness, and appreciation for life.” Most discussions or articles on gratitude become, for me, an exercise in anecdotes and platitudes. Happy anecdotes and happy platitudes, mind you, but somehow unsatisfying. We all seem to know intuitively that our grandmas were right: saying “thank you” is a good thing.

Now, thanks to Dr. Emmons and his contemporaries, we have a sound scientific footing that proves the usefulness of showing gratitude. The early studies from Emmons (and his various co-authors) showed that people who are consistently grateful are happier, more hopeful, and more energetic. In addition, they are less likely to be neurotic, lonely, anxious, or depressed. While early research did not conclusively show causality, subsequent studies have done just that.

One study designed to get at causality studied a group that did an exercise similar to the one below. The group which did the exercise showed significant improvements in both outlook (feelings of happiness, optimism, and satisfaction) and physical health (reduced incidences of everything from acne to headaches) versus a control group. In addition, both younger and older people with chronic illnesses performed the same exercise. The “gratitude group” — even though infirmed — achieved similar results as the main study, including getting more hours of quality sleep.

Okay — Psychologists Proved Grandma Was Right. How Does This Help Traders?

Digging deeper into the work on gratitude, Dr. Sonya Lyubomirsky summarized eight reasons that practicing gratitude is useful. I’ve listed them below and added commentary on how each applies to traders and investors:

  1. Grateful thinking helps us savor positive life experiences.
    I’ve known too many traders who beat themselves up over losses or bad trades and then could never stop to appreciate a well-executed trade. Such imbalance actually pushes us toward bad trading behavior just so we can feel something. Enjoying the process of trading, “the game” as it were, is a key to longevity in the business.
  2. Expressing gratitude bolsters self-worth and self-esteem.
    Traders going through a tough spell can spiral downward and crash their confidence. It’s almost impossible to trade well when your confidence is shot.
  3. Gratitude helps people cope with stress and trauma.
    Trading certainly exposes traders to stressful situations more than most. Anything that can be done to cope better with the stress and uncertainty of the markets should be embraced!
  4. Expressing gratitude promotes moral behavior.
    Here, the researchers translate gratitude to mean kindness, helping others, etc. In a business that is the ultimate meritocracy such as trading, thinking outside of one’s self is a good thing.
  5. Gratitude can help build social bonds (don’t use people as means to an end).
    Trading can be a singularly lonely endeavor. Building a social network, especially with other traders and investors, is useful for breaking out of the “me against the world” mentality. That’s one of the most under-appreciated aspects of attending a workshop! Also, combining #4 with #5, trading is a cut and dried win or lose proposition. It’s easy in such an environment to see people as a means to an end. Do you have useful information for me? If not, then away with you! Practicing gratitude helps us see every person we meet as a unique and valuable creation instead of as a binary entity — useful/not useful.
  6. Expressing gratitude tends to subdue individual comparisons with others.
    If you go around comparing yourself to Soros’ 40% annual compounding for decades, Paulson multi-billion gains, or Seykota’s incredible percent return records, you’ll create a long, tough go for yourself by chasing those kinds of numbers. Focus instead on improving your performance over previous performance.
  7. Practicing gratitude diminishes negative emotions (anger, bitterness, etc.).
    It’s really difficult (by orders of magnitude) to do any cognitive processing while harboring negative emotions. And likewise, it’s difficult to be negative and grateful at the same time
  8. Gratitude helps thwart hedonic adaptation (just wait, it’s better than it sounds).
    Here’s a quick summary of hedonic adaptation: in simple terms, humans act with an emotional thermostat, returning to a near baseline state after an outside change. So when we get bad news, we are able to make the mental adjustments to adapt and carry on instead of feeling low or being out of commission for long periods. That’s a good thing in most cases. Unfortunately, the same thermostat works in our reaction to positive events. When something good happens, this mechanism guides us over time to drift back down to near our “happiness set-point” that we had before the event. In short — gratitude helps us keep that positive (and usually more productive) mental state for a longer time.

Now for the Challenge

The evidence is clear that giving thanks or being grateful is not just a good idea, it’s a way to live a fuller life. Does science also give us ways to grow our “gratitude muscle”? Thankfully (no pun intended), the answer is yes.

So here’s my challenge and my promise: complete both of these projects and you will get two benefits. First, you’ll find yourself in a happier, more productive state more of the time. Secondly, your trading will improve (largely because of the previous benefit and the eight listed above).

If you earnestly follow both parts of the challenge and don’t receive any benefit, I’ll gladly donate $100 to the charity of your choice.

Project Number 1: Weekly Gratitude List

Every Sunday night, for the next 10 weeks, follow this simple exercise (from Dr. Lyubomirsky): “There are many things in our lives, both large and small, that we might be grateful about.” Think back over the events of the past week and write down on the lines below up to 5 things that happened for which you are grateful or thankful.


It’s important that you only do this once a week! Research shows that more frequent repetition diminishes the effect. The researchers believe that a more frequent requirement turns the project into a “chore” instead of remaining fresh and meaningful.

Project Number 2: Express Gratitude Directly to Another

Think of someone in the field of trading or investing for whom you are grateful. Perhaps a mentor, thought leader, coach, model trader, researcher, system designer, etc. If this is someone you know, great. For some, it may be someone you know only through their work or reputation. This works equally as well.

Within the next seven days, write this person a letter of gratitude telling them exactly what they have done that has impacted you in a positive way. Also, write the specific change it has made for you.

If possible, deliver the letter in person. If not, mail or email will work as well.
Don’t be shy about asking your gratitude recipient for a response. This will complete the gratitude circle and add to the experience.

It’s hard to imagine that anyone would not receive a positive experience from these two activities. I hope that you’ll accept the challenge and reap the benefits.

May you and your family enjoy a Thanksgiving full of gratitude, love and joy. If you’re not in the U.S., take a few moments next Thursday to flex your gratitude muscles right along with us!

As you can tell, I really admire researchers who give us applied psychology tools (Van has been doing it for decades). I’d love to hear your thoughts and feedback — just send an email to drbarton “at” Until next time…

Great Trading,
D. R.

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