Investment and Speculation (2)

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Serial News "Trading Philosophy" … 17

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A person who was scammed in finance said:

“But he didn’t look like a bad person. He was kind in many ways~”

Being naive and saying you were “kind” after being deceived is what makes you a target.

In the first place, if you look like a bad person, you cannot work as a fraudster.

People working at a securities company are

“prohibited from trading solely for speculative profit.”

Then, how do we define what is “speculation” and what is “investment”?

Even securities companies that allow employees to trade stocks restrict to physical buying only, for example with a rule like “hold for six months or more.”

“I see,” many people might think, but… the part that remains is the doubt about the rule of “not selling for six months.”

Is it acceptable to ignore the logic that being able to sell anytime allows holding highly volatile listed stocks, while a time constraint makes it “dangerous”…?

Of course, if you engage in short-term trading, you risk “making a mistake as a financial professional” or “becoming a problem at the public investor window,” so the correct approach is to “consistently target six months or more of price movement.”

Perhaps because that definition alone cannot properly supervise staff, they arrived at rules like “hold for six months or more.” If you consider the essence of the matter, you should be free to recommend to clients and trade to understand market nuances yourself, and from a completely different perspective, you should guide to prevent mistakes.

There are stories of employees at collapsed securities firms being forced to buy大量 of the company’s stock near bankruptcy, and most of the funds being borrowed—being in a state of double or triple binding is extremely dangerous. At the very least, the logic that “holding physical shares for a fixed period is safe” has been proven not to hold.

I do not recommend short-term trading. I advise not to get involved.

But, whether it’s buying or short selling, if you feel “this was different!” you should exit, reduce the quantity—that is the iron rule.

While you hold a position, you should think that you are “bearing risk.”

The idea that “investment is slow and safe, speculation is quick and dangerous” is mistaken common sense, information you should not casually listen to.

There is also a danger in lacking the concept of “selling,” leading to an overemphasis on buying.