“Is It Profitable for People Who Are Unperceptive?” Column Now Online on Toyokeizai ONLINE
Good morning, this is Matsushita.
One of my important jobs is
to answer the worries and questions of individual investors.
.
Having continued this work for 14 years,
I have literally answered thousands of questions.
Investors' questions and concerns are endless,
and in fact these thousands of times of work
always repeat the same things.
In other words, what you are worried about,
and what you don’t understand, are astonishingly common.
You are always worrying about the same things.
One of them is,
how to trade as skillfully as possible
—a kind of ultimate challenge.
However, this challenge can surprisingly easily
be answered.
Whether stocks or FX,
even if you relentlessly try to increase accuracy,
there are inherent limits.
Winning rate will never reach 100%,
and you cannot make losses zero.
We cannot predict the future with 100% probability,
and in fact the future is always unpredictable.
When you’ve traded for ten years,
you will realize this somewhere along the way.
Therefore, at some point,
instead of trying to dramatically increase accuracy,
you find a point where you reasonably compromise.
Even if you infinitely increase the number of checkpoints to verify,
there is no guarantee that the accuracy will rise accordingly,
so you balance the effort of checking with profits,
and, in a way that requires as little effort as possible,
increase profits.
However, of course there are negative times and trades,
disadvantages and patience involved.
“Some of this is unavoidable.”
In a sense, people who win in investing are
good at compromising and are somewhat desensitized.
If you are too sensitive,
you think, that’s not good, so you respond to it,
and this not good either, so you respond to that,
and that not good either, so you respond to that,
and so on—the number of responses and tasks grows infinitely.
And eventually you become tired,
but your profits do not rise in proportion to the fatigue.
Investing increases profits as you continue.
To continue, you need to be good at taking it easy,
you need to cut corners.
In that sense, being desensitized might be just right.
Are you becoming too sensitive to trading results?
Please think about it for a moment.
