A 23-year-old, shall I confess a story from when I failed in the stock market.
Hello, this is Koyama.
“Saving is bad”
Keisuke Honda's Twitter
recently became a topic.
Mr. Keisuke Honda, by using the money he earned,
appears to have purchased shares in startups,
and reportedly has little to no savings.
On December 14, 2017,
he posted the following tweets.
“I understand the importance of saving,
but I’m against saving and I use everything except what I need for living expenses
for investment instead of consumption.
Investment, in athletes’ terms,
is like physical training.
It isn’t a one-time thing;
it’s important to continue investing.”
Thus, he has consistently denied saving,
and in response,there were voices of criticism as well.
People criticize with phrases like
“You can say that because you have money to spare!”It seems there are criticisms with that nuance as well.
“In the first place, my life is so tight
that I’m barely getting by,
so there’s no way I can buy high-risk things like stocks!”
Some people must think this way,too.
What do you think?
Perhaps you too have felt that saving is bad and
you’re annoyed by it.
“From the start, living costs are tight,
and even if you managed to gain profits from stocks,
it wouldn’t be a substantial income.
Then it’s safer to just save rather than dabble in stocks.”
That may be your thinking.
For those who worry about retirement, about illness or disasters,
there may be no way to shake those concerns,
but the more anxious you are, the more you want to focus on things that seem certain.
That is a natural psychology.
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The 23-year-old’s failure
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The fear of investing one’s meager money,
I understand that.
Because I wasn’t rich from the start either.
Also, to be honest,
I actually have a past where Ifailed in stocks.
Therefore, I can understand why people say
“stocks don’t make money,”or
“there’s risk, so it’s scary.”
In fact, at 23, Itraded stocks
and earned some profits temporarily,
but eventually I incurred losses.
Back then, like other ordinary traders,
I wondered,
“Which stocks will go up?”I looked at charts
and thought,
and traded,“If I follow this sign I’ll win.” but I did not win at all.
“Ah, stocks don’t make money at all.”
I deeply felt that.
So, many people have
an image of stocks as“unprofitable.”
I can understand that well.
However…
Seven years later, something happened that changed my thinking 180 degrees.
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I thought margin trading was dangerous.
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When I was about 30,
I teamed up with a friend and started a company.
In the early days of the venture,
we talked daily about
“what business will be profitable.”
Then,
“instead of a business,
personally, would trading stocks be profitable?”
That idea came up.
Because I have painful memories from 23,
I said,“No, stocks don’t make money. I know better.”
I opposed it.
But, my partner
started personal stock trading.
“I don’t think it will make money, though,”
he thought
and three months passed.
Three months later,
“How’s stock trading?”
I asked,“Are you making money?”
He replied unexpectedly.
“Yes, I’m making money.”
He said he was
engaged in margin trading.
For me at that time,
margin tradingwas an unknown realm. it felt “just dangerous.”
To be honest,In reality,
that wasn’t the case at all,
but the media gave me the impression
“margin trading is dangerous.”
That biased impression existed.
But that became a trigger for me
to think about margin trading more deeply.
And then, after a while, I suddenly thought:
“If you narrow to one stock,
it either goes up or down.
If so,perhaps
by holding both a buy and a sell in certain proportions
there could be a way to profit whether it goes up or down.”
And thus,
at first, there wasn't a concrete plan about
the exact buy/sell ratio.
Anyway, by holding both positions in some proportion
it seemed possible to steadily gain profits,
and I thought so.
Furthermore, regarding stock selection,
I came to think
“Wouldn’t it be okay to choose stocks that tend to move within a certain price range,
within which they stay relatively stable?”I concluded.
By holding a fixed proportion of buy and selland selecting stocks likely to stay within a certain price range
I could trade with a single stock and
achieve remarkably low risk and win, I thought.
After that, I pondered what proportions
I should hold for buy and sell,
which stocks would be appropriate,
and after thinking through these points,
I actually tried trading, and...
the 23-year-old’s failure seemed to be a lie as profits began to appear.
And profits came easily!
Back at 23,
the me who frantically searched for rising stocks
felt embarrassed at how much effort I had spent to make profits so easily now.
Using a basic mobile phone, taking advantage of brief spare moments
and making small trades would yield profits.
Without any deception, from then until now
I have never ended a year with an overall loss.
Of course, this is obvious, not due to beginner’s luck
It wasn’t that I only had a lucky start.
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It doesn’t matter how much capital you have!
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To be honest, when I started my business at 30,
I did not have abundant funds.
Nevertheless I devised
a margin-trading-based approach
and once I started using it
profits began to come in steadily,
and now I live a comfortable life in a Tokyo high-rise.
Of course, retirement concerns are gone.
Back to the original topic,
you may think, and
“Stocks are meaningless,”
“people with little capital must feel that way.”
Yet, as I have actually realized,
depending on the method,
you can achieve a life so wealthy that worries about the future disappear.
It is quite possible.
In the past, I too held a negative image of stocks,
so I’m not preaching arrogantly,
but don’t decide that stocks are dangerous and off-limits.
Please consider investing with a broader perspective.
With a small shift in thinking,
your life can change dramatically.
With that, thank you for watching until the end today as well.
Thank you.
Keizo Shimoyama
