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What Can Brazilian Jiu-Jitsu Teach You About Investing?

Updated: Mar 23


<img decoding="async" aria-describedby="caption-attachment-611" class="size-medium wp-image-611 lazyload" src="https://michaelhbaker.com/wp-content/uploads/2016/02/IMG_0745-300x300.jpg" alt="Me and Professor Jeremy Arel" width="300" height="300" srcset="https://michaelhbaker.com/wp-content/uploads/2016/02/IMG_0745-300x300.jpg 300w, https://michaelhbaker.com/wp-content/uploads/2016/02/IMG_0745-150x150.jpg 150w, https://michaelhbaker.com/wp-content/uploads/2016/02/IMG_0745-768x768.jpg 768w, https://michaelhbaker.com/wp-content/uploads/2016/02/IMG_0745-1024x1024.jpg 1024w" sizes="(max-width: 300px) 100vw, 300px" />

Me and Professor Jeremy Arel


If you’re reading the title of this article, you’re probably wondering “What on Earth is JiuJitsu?” And, as long as you didn’t conjure up an image of someone doing a karate chop in your mind, we can still be friends. To be specific, I’m referring to Brazilian Jiu Jitsu, and it’s a martial art that focuses on grappling and submissions. If you need a demonstration, you can check out a video here.


I have been training in jiujitsu now for about 5 years, and it’s a sport like no other. It requires discipline, commitment, and a teachable spirit. As you can expect, the sport has its own language and culture, and my favorite aspect of learning this martial art is that it requires a healthy ego, meaning you have to be ok with getting smashed every now and then…and you have to take losing like a champion. If you can’t handle getting beat, you won’t last long in this sport.


I could go on and on about my love for grappling, but I want to share with you how grappling can be just like investing. Yes, you read that correctly–I’m going to attempt to pull off a completely random sports metaphor by comparing investing and Brazilian jiu-jitsu.

So, here we go:


1) Everyone loves the idea. In the world of investing, everyone loves the idea of being an investor and watching their money grow. The same is true in jiu-jitsu. Everyone loves the idea of being a blackbelt or expert. However, few people take the time to really understand what it takes to reach that level of success. In jiu-jitsu, it’s not uncommon for a person to spend 10+ years training before attaining the rank of blackbelt. This requires a commitment that is unique in the martial arts world. With investing, you also need to be committed and give your investments time in the markets. No one is an overnight success in investing–the same is true with jiu-jitsu.


2) You are programmed for failure. When you start out grappling, you have the rank of white belt, which is the rank of a beginner. At our school, we do our best to encourage and nurture white belts because they ultimately are the future of our academy. Our professor, Jeremy Arel, often states that “We don’t find great training partners, we make them.” What he means is that we take extra care to not hurt the beginners and to show them the correct way to train. Otherwise, they won’t last very long.


The reason so much care must be given to protecting our beginners is that we are wired completely wrong to defend ourselves against a jiu-jitsu expert. You see, jiu-jitsu is a martial art of strategy, technique, patience, and leverage—a combination that few people have naturally. So, what happens? To put it bluntly, “White belts do stupid stuff.” For example, when inexperienced grapplers are feeling threatened, they resort to the “flight” instinct and try to get away, turning their back to their opponent. In jiu-jitsu, this is a cardinal sin and will likely end up with you being choked (not a good outcome) or worse.


Investing is quite similar in that we are wired all wrong when it comes to our emotions and psychology. It’s been proven in multiple studies that people tend to experience the pain of loss 2x greater than they experience the joy of a gain. Thus, when the stock markets are moving down or correcting, the pain of watching your accounts go down is amplified by your own psychology. This often results in investors attempting something unwise–like going to cash or buying gold to protect them from Armageddon….only to miss out on the eventual recovery. In this case, they didn’t need someone else to do harm–investors do it to themselves.


3) You must be comfortable being uncomfortable. With investing, there will be times that really test your resolve. All of the news seems bad (this is the norm now). The economic outlook appears bleak. You are afraid of what scheme Washington D.C. may be planning. Essentially, everywhere you look things only confirm to you how bad it is. Most likely, you are suffering from something called confirmation bias….where you unconsciously seek information and data that does nothing but affirm your beliefs. The reason that it’s so difficult for people to be successful with their investments, is that they cannot understand that bad times do come…and they also go. This is the economic cycle, and it’s normal. When bad times come, people are going to bail on their investments-don’t let that be you.


Bad times are the times to stay focused and consider buying. Like an experienced jiu-jitsu player, take advantage of other people’s mistakes. Consider purchasing other people’s investments while they are on sale.


With Jiu-jitsu, you must also learn to cope with discomfort. When you start out on your grappling journey, you’re going to be put in many uncomfortable positions; and you must learn to stay calm and not panic. If you have a coach that watches you train, you will often hear the command to “BREATHE.” As you begin to learn and develop some technique, your ability to win grappling exchanges and find positive positions will only increase—but then you face what everyone in our sport knows and dreads–a plateau or regression. This is when you feel like everything you are doing is wrong, everyone else is improving, and you simply stink at jiu-jitsu. Of course, none of this is true–it’s just part of the game. Plateaus come, and it’s part of the process. Yes, they are frustrating, but just like market cycles, the best course of action is to persevere through it. Don’t give up on yourself, for this too, shall pass.


Jiu-jitsu is an amazing martial art. I have been an athlete almost my entire life, but I only participated in team sports. While jiu-jitsu schools or academies can definitely foster a team environment, no one steps onto the mat with you. It comes down to you and your opponent. It takes years to develop a complete grappler, as one moves through various levels of competency.


The same is true in finance. No one starts out knowing everything–in fact, most of the knowledge people begin with is incorrect. At our school, we have a professor who cares about his students and wants each of them to be the best they can be. That’s how I view the people I am able to serve in their financial lives. Each one has a different story and has their own unique journey. The key is staying committed when times get tough and learning how to control your biggest enemy when it comes to success–yourself.

Investment Advisory Services offered through AlphaStar Capital Management, LLC., a SEC Registered Investment Advisor. AlphaStar Capital Management, LLC and Vertex Capital Advisors, LLC are independent entities. Insurance products and services are offered through individually licensed and appointed agents in various jurisdictions. Vertex Capital Advisors, LLC does not offer legal or tax advice.


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