Investors who laugh at the "K-type market" after earnings, and the thinking differences of investors who cry.
Hello, this is Shimo-yama.
“A man typically falls due to one of three things,
drinking, money, and women.”
I shared such a story in the previous newsletter.
When you read history, it’s usually due to these three that men degenerate.
Men fall from grace.
In response to this story
a student of the Stock Academy
commented,“Shimo-yama seems to be fine with all three, right? (laughs)”
I received such comments.
Well, that may be true.
I don’t drink anyway,
and I’m not a particularly greedy person.
Since I don’t have much material desire,
there’s no motivation like,
“I’ll make a lot of money to acquire something expensive.”I don’t have that either.
The likelihood of being swayed by desires
is quite low,
but since I’m human with emotions,
a small misstep could lead to a fall.
So,
I’m constantly cautious to avoid traps.
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Is Shimo-yama greedy?
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However,although I have less desire than most people,
the opposite is said about me online,that I am greedy.
There are even online posts like,
'What I teach in the investment school is
to milk students for money.'There are such things on the internet.
That’s completely different from reality.
I wonder,on what basis would someone say such a thing?
I think.
Suppose I thought,
“If I enrolled this person in my school, I’d earn this much.”
In that case,
my motivation would be money,and I would teach accordingly.
If that were true,
the Stock Academy, a trading school,would have disappeared long ago.
If I were really looking at students with such eyes,(￥_￥)
I’d think,
“Gather more people and earn more money!”
That would be my thinking.
Then,
“Say anything, just attract people!”
would be the motto.
If I released exaggerated advertisements,
surely people would flock for a while.
But,people who joined Stock Academy based on such exaggerated ads
would be disappointed.
“It’s not what you said!”
they’d complain.
As a result, Stock Academy’s reputation would decline,
and eventually it would become a school that no one pays attention to,and operations would fail,
Stock Academy would disappear.
In other words,it’s a classic example of being swayed by money and falling.
From this, it’s clear that
“desiring too much leads to bad outcomes.”
and
I don’t have much desire to begin with,so I’ll reiterate
“I do not teach in investment school for money.”
Of course,since I’m not a volunteer,
as long as I teach, I charge tuition,
but that is not my purpose.
My purpose is simply
to teach students trading and to help them earn.
Nothing more, nothing less.
I already earn enough money from trading,so I don’t need others’ money for that.
I don’t care what some stranger with no name or face says about me,
but it’s true that negative posts persuade some people,
so I would like those who read this newsletter to
understand this point.
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Investors who laugh at the K-shaped market, and those who cry, differ in thought.
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Now,I will introduce what Stock Academy teaches.
Recently,the term
“K-shaped market”
has been heard often.After the pandemic caused a broad stock price drop,
some stocks recover while others fall further,
creating a polarization that resembles the letter K.
This is why it’s described that way.
In a world that changed greatly due to COVID,
some companies adapted, others did not,
leading to large differences in performance,
and that was reflected in the most recent earnings reports,
and in stock prices after the earnings.
What would you think when you hear this?
Would you think,
“Gather information and identify companies that grow during COVID.”
That’s the most common approach, right?
For example, companies that provide products or services in demand with increased telework and home time would fit,
such as gaming, computers, and peer-to-peer commerce,
but if you read earnings-related articles in the Nikkei, several companies stand out:
“Square Enix HD, profits up 3.5x”
Reference:
https://www.nikkei.com/article/DGKKZO62377520W0A800C2DTD000/
“Electronics retailers all increase profits and return to black in April–June”
Reference:
https://www.nikkei.com/article/DGXMZO62371500W0A800C2DTB000/
“Mercari up 48% revenue, 76.2 billion yen previous term, surge in person-to-person trading”
Reference:
https://www.nikkei.com/article/DGKKZO62377810W0A800C2DTB000/
Yet, this is something everyone thinks about.
Unfortunately, following the same thinking as most people,
trading with the same informationdoes not yield large profits in the world of investing.
If profits came that easily,
everyone would be rich.
The more people expect a rise, the harder it is to rise; the more people expect a fall, the less likely it is to fall. Markets have such tendencies, and
even if fundamentals are strong, stock prices do not always go up.
Experienced investors know this from real experience...
“There is no absolute in the market.”
That is the truth of the market.
Therefore,
to reliably profit from investing,
you need a step further, a deeper way of thinking.
Before trading,
thinking, “it will go up or down,”
that isn’t bad,
but the truly important thing is to be prepared to deal with whatever happens in the market.
For those who have continued reading this newsletter, this is a familiar topic, right?
I’ve said it many times, to the point you might be tired of it.
For many, the simplest information is, “Which stocks rise after earnings?”
and that is appealing,
but even if told to “prepare to handle any market condition,”
it may not click for you...
no one will be able to refute this.
As a final aside,
from my perspective, considering global economic conditions,
as a general trend of the Japanese stock market,I continue to trade with a
bearish perspective.
There are stocks that rise, but for the overall Japanese market I remain bearish.
However, I do not trade bound by that view alone.
I do take selling-favorable trades, but I also consider cases where prices rise, always balancing buy and sell positions.
This is why I can stay in the market and continue to lock in profits, no matter what happens.
Thank you for reading until the end today as well.
Shimo-yama Keizo
