What Sumo Wrestling Taught Me About Trading

You never know where you’ll be or what you’ll be doing when a major life lesson hits you.

The last place I ever expected to learn a trading lesson that will forever stick with me was on a visit to Japan with my then-girlfriend.

We’re married now, with three kids, and we still laugh about this experience.

It was 2017, and I found myself at the Ryogoku Kokyugican, the premier Sumo stadium in Tokyo where they host a 15-day championship tournament.

It was like nothing I’d ever seen before.

I’m not sheltered when it comes to sports. I grew up in Miami going to Dolphins games at Joe Robbie Stadium with my father, Hurricanes games in the Orange Bowl, Heat games at Miami Arena, and even some hockey and tennis tournaments.

My dad also took me to watch soccer games and even a few Arena Football League games, believe it or not. I’ve been to plenty of sporting events. 

But Sumo in Tokyo is nothing like any of those other things.

It’s not like an NFL football game, with basically 70,000 inebriated men. 

You had people of all ages, sexes, and all walks of life packed into this arena in Tokyo… older ladies, young children, men dressed up nice, casually dressed folks.

We went on the 15th day of the tournament. This is like Game Seven or the Super Bowl of Sumo.

The day starts early, with the younger, up-and-coming wrestlers fighting first.

We even saw a few of them walking into the local McDonald’s after their fight, still wearing their traditional Japanese garment and “geta,” which are these wooden sandals that have elevated soles.

It was wild.

Once we made it into the arena, I immediately noticed we were the only Americans. There was no English spoken.

There were about 35 to 40 matches scheduled throughout the day, with each match more important than the one before… until the final match of the day to determine the tournament champion.

This last match was best two out of three. It was the only one of the day where that was the case. The rest are one-and-done.

What’s also hilarious were the get-ups the referees wore got wilder and wilder with each, more important match. By the time the final matches got going, the crazy outfits these guys had on were next level.

At one point, I was walking down the hall by the concession stands to get a bento box and sake to bring back to my seats.

I spotted a guy with a Pittsburgh Steelers cap on, the only other American in the whole place. He spotted me right away too.

As we passed each other, he looked at me and whispered in my ear, “This is sh*t is f***ing crazy, huh?” and kept right on walking.

There were also zero Americans on the Sumo rosters. They were almost all Japanese, with two or three exceptions – one Mexican dude and a couple Eastern European guys.

You can tell by all the hair they had on their bodies. The Japanese guys have none. And the last names are a dead giveaway, too.

But, basically, all Japanese wrestlers.

Here’s the thing we noticed: no end-zone dancing.

In America, if a player scores a touchdown, hits a home run, nails a three-point shot, or even sinks a long put, there is at least a smile, maybe even a fist-pump.

In American football, they’ll even organize dance routines among entire defenses and wide receiver rooms to celebrate their success.

Not in Sumo.

As soon as the match is over, both participants return to the center of the ring and bow. Then they walk away as if nothing happened.

After observing this behavior for a bit, I started to pay closer attention.

I realized that if we closed our eyes during the match then reopened them as soon as it was over – usually about five to 12 seconds later – you wouldn’t be able to tell who actually won.

I don’t know the fighters names, nor could I understand a lick of what the announcer was saying. So I had no way of knowing who won without watching one guy push the other guy out of the ring.

It was fascinating and unlike anything I’d ever experienced at any American sporting event – and I’ve been to plenty.

The respect these fighters had for the sport, the venue, their culture, and the moment was surreal. 

The discipline to not celebrate or to not express disappointment – to the point where observers couldn’t tell who won – caught me off guard.

Of all the things I experienced, that hit me hardest.

I was sitting there watching, drinking my sake, eating my sushi and chicken out of a box, smiling every second. It was one of the most amazing experiences of my life.

I love sports, and I played at a reasonably high level. But to see this kind of discipline was shocking.

Not a single wrestler in any of the 35 to 40 matches had any kind of emotional reaction, even the few guys who weren’t Japanese.

OK, I did catch one Bulgarian guy with a semi fist-pump after one of the matches, and you could tell he was holding himself back.)

But that was it. Not a single emotion from any other wrestler the entire day. 

It was all business, all respect.

There’s a lot traders and investors can learn from observing this kind of behavior in action.

It’s tough, I get it: If we have a great trade and make a lot of money, it’s hard not to be pleased with that scenario.

I’ve had these feelings myself, over many years.

On the other hand, if we have a losing trade and we get stopped out, or perhaps an unrealized gain turns into a loss, it doesn’t feel great.

That’s just a part of life.

To be disciplined enough to keep it balanced, to not get too high or too low, to come back to – literally – fight another day, like a Sumo wrestler…

I’ll be first to tell you, it hit me hard. It made me rethink a lot of my own behavior, not just the patterns of those around me.

The Sumo culture of quiet composure is night and day compared to Wall Street trading floors full of people yelling and screaming.

And that’s the lesson.

Trade like a Sumo wrestler.

If you lose, too bad. Suck it up, try again, and do better next time.

If you win, great, get back, and try to win again. 

This is a simple concept, but it’s not the easiest to execute.

Striving toward a Sumo state of mind is the goal.

This Week in Everybody’s Wrong

On Monday, we took a trip across the international date line to what might be my favorite country in the world.

It took about 35 years, but the Nikkei is making new highs again.

Here’s why – and how – we’re looking to increase our exposure to Japan.

On Tuesday, discussed the “average” return for the S&P 500, which is anywhere from 8% to 10% based on when you start counting.

“Average” returns are less than meaningless and are, in fact, dangerous, especially if your goal is to make money in the stock market.

How often would you say “average” returns happen… and don’t you think we can do better?

On Wednesday, we learned that Utilities can be a bull market asset too.

I’ve been around long enough to have seen Utilities lead like they have since early 2024, but it’s not really that rare.

Remember, the only way to make sure you own the best stocks is to buy the best stocks.

On Thursday, we talked about two stocks, one night, and half a trillion dollars in market cap added in a matter of minutes.

During bull markets, investors who own stocks make a lot more money than investors who do not own stocks.

And price action continues to indicate this is a bull market.

On Friday, we explored the mysteries of yet another simple but often misunderstood stock market concept.

Is the market strong during a seasonally weak period? Is the market weak during a seasonally strong period?

So… are you asking the right questions about seasonality?

On Saturday, Quantitative Analyst Grant Hawkridge took us from financial markets to golf courses for another great read at the end of an interesting week.

Grant helps us break down our “swings” when it comes to making shots and trading stocks.

Here’s why, at TrendLabs, it’s about structure over emotion.

Have a great Sunday.

We’ll see you Monday morning…

Stay sharp,

JC Parets, CMT
Founder, TrendLabs