Column published in Toyo Keizai ONLINE: When will the ultra-giant trend occur?

Good morning, this is Matsushita.

The mega-trend, when does it occur,

and under what circumstances does it arise?

Do you want to know that?

Of course you want to know,

I want to know as well.

However, I do know.

The mega-trend, when and

under what circumstances it arises,

is written in the first line of the investment book I read,

“Market Wizards.”

This book is a collection of interviews with American success stories,

super traders and fund managers,

and among them, the first interviewee Michael Marcus

says this.

“Fundamentals, technicals, and market tone—

when these three align, the best trades become possible.”

This is the condition for the best trades,

and I believe it applies just as much to trends.

The best trend following is

completed when this happens.

The term “market tone” is not used very often, but

in the original it was market tone.

In meaning, it refers to the overall market mood,

or investor sentiment, I think.

When fundamentals, technicals, and investor psychology align,

a mega-trend occurs.

Especially when the monthly technical conditions align,

that trend becomes enormous.

We have seen this many times right before our eyes.

Recently, in December 2012, the Abe-nomics stock rise/yen decline trend occurred,

and before that, from 2005 to 2007,

the same stock rise/yen decline trend happened.

In both mega-trends, individual investors in the market were intoxicated by a rapid surge of funds,

but they misunderstood it as their own skill,

and most investors ended up losing all their profits afterward.

It is an opportunity that comes only once every few years,

in a sense, an accidental profit.

Investors who understand this protect their profits well,

and when another mega-trend visits a few years later,

they again increase their funds.

The above mega-trends occur with roughly a five-year interval,

creating the impression that “every five years, a big opportunity comes.”

)

When a mega-trend occurs,

it does not automatically mean profits will rise.

If you are not properly prepared,

even if a mega-trend occurs,

profits rise only temporarily,

and you end up giving everything back afterward.

That is meaningless, and

you become discouraged and disheartened instead.

Four to five years have already passed since the last mega-trend occurred.

When and where will the next mega-trend occur?

Please have your knowledge, skills, and mindset properly in order by then.

Regularly, the market brings great opportunities.