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Jiu Jitsu and Economics

Andrew is a self-educated business owner and entrepreneur with plenty of free advice (which is worth exactly what you pay for it!).

Andrew Smith at his gym, Revolution BJJ in Richmond, VA

Andrew Smith at his gym, Revolution BJJ in Richmond, VA

Gentle Economics

"Jiu jitsu" roughly translates as "the gentle art", which can certainly be a misleading moniker (anyone who has trained even once understands this at some level). What's often really meant by this is that the ultimate goal of jiu jitsu is to use less energy to accomplish the task at hand, or to do it efficiently. There are a few obvious corollaries with economics here: increased future efficiency is clearly one of the main reasons people study economics, and humanity tends to benefit from doing the same job with fewer resources used up. I think there are some other interesting and useful observations we can make between the two disciplines.

Lesson 1: Learning When to Use Resources

At its core, economics is the study of the transfer of resources from one place (person or entity) to another, given that those resources might be better spent somewhere else. A careful study of economic implications can lead to far greater efficiency in a society or company, and taking a similar look at your jiu jitsu game can have similar benefits. If you're a jiu jitsu practitioner, think back to your first week of rolling (live training) and remember how exhausted you were after training for a minute or two. Clearly, you've likely gotten into better shape over time as you've trained, but that's probably not the main reason why you were so exhausted back then, and can roll for so much longer now. It has everything to do with your overall efficiency. Back to that first rolling experience: everything probably seemed so intense and important. There were no positions or moments that seemed much more important than any others, and so, as a result, you spazzed out a little (or a lot) and burned a ton of energy in every position you were in, every second of the roll.

How do I know this? It's because I've watched hundreds of beginners go through Revolution BJJ's intro program over the last decade, and I've seen how virtually everyone starts out this way. Now, consider the way the average practitioner evolves over time to understand that you don't have to exude a constant halo of energy out into the universe in all directions, but instead, you can pick when to apply a little more effort. Meanwhile, conserving energy is the name of the game. Clearly, if you're running a company, it's important to consider where all of the company's scarce resources end up. Cash shouldn't be spent on "hookers and blow", as my business partner Trey is fond of saying, but instead should be allocated toward sustaining and growing the business.

Jiu Jitsu: the Economical Art

Lesson 2: Risk and Reward

The second key lesson from economics (and, especially, from investing) is the idea of risk and reward. Let's zoom in on a few common scenarios that many of us have been through as jiu jitsu practitioners. Imagine you're a newer white belt, and you have a dominant position—let's say mount for this example—but your goal is to get a submission. Naturally, you go for the first opportunity you see: an armbar. It looks so appealing, and all you have to do is step over their head to get the arm isolated... but in doing so, you end up losing your top position, getting rolled from mount, and now you're on the bottom, just trying to get back to closed guard.

A second scenario, perhaps all too real for many of us, is that you're competing in a tournament, and you're ahead on points. In your lust for the almighty submission, you replicate the above rolling scenario, but end up getting your guard passed as a result, and losing on points in the last few seconds of the match. Clearly, the reward you were after here just cost you the match. I think we can make a compelling argument that this wasn't a smart decision, given the risk/reward ratio at hand.

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Turning your back to avoid a guard pass can be a more complicated investment (or gamble), and this one's not so clear-cut. Sometimes it can really pay off, as you can get to turtle and then recover guard. However, you might also get your back taken, the worst position in all of jiu jitsu; and, in your quest to avoid giving up a guard pass, you end up giving up something even worse.

These types of trade-offs are made in investing all the time, and just like with jiu jitsu, some of these decisions are very, very easy to make, while others are much tougher. Do you risk giving up your back in order to avoid giving up 3 points for a guard pass? The answer is, just like with an investment decision about whether to sell a stock: it depends.

Lesson 3: Patience and Timing are Crucial

If you're stuck underneath side control in jiu jitsu, it can be really tempting to try to rush an escape. If your inevitable haste, you end up making things much, much worse for yourself by either turning your back (as previously mentioned), giving up mount or knee on stomach (worth more points in a sport match, and maybe better for your partner), or you get submitted with an armlock or choke. In other words, you allow frustration and emotion to get into the driver's seat, instead of observing the situation and making the rational decision to wait until there's a better opportunity to escape.

In investing, we saw a great deal of attention drawn to the GameStop stock trade in early 2021. Naturally, many traders became excited at the prospect of very fast returns, and since everyone was doing it, it seemed like a great idea to dive in to a trade. As a result, quite a lot of retail traders were burned as they bought the stock at very high prices, and then sold at much lower prices, worrying about being wiped out. Being patient in stock investing involves being willing to watch others get rich while taking on disproportionate risk; and remembering that just because someone was successful in a particular action, doesn't mean that action was a good idea. Tend your stock garden carefully.


© 2021 Andrew Smith

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