“A column currently published on Toyo Keizai ONLINE” Turn the crash into profit

Good morning, this is Matsushita.

Yesterday's NY Dow fell slightly.

During the session it rose, but toward the close

its value was shaved off.

From a temporary crash, the movement is seeking a calm point

in price action.

Turning a crash into profit.

Words that seem to appear in the copy of online investment information products.

The big crash of this NY Dow,

and the subsequent crash of the domestic market,

as someone witnessed it,

they might have thought, it would be nice to be able to do what this phrase suggests.

What this phrase evokes is

the image of recognizing a crash in advance, selling ahead of time, and

when the crash actually occurs, obtaining enormous profits

through a selling trade.

However, even these common online copy phrases

rarely allow you to foresee a crash in advance.

In reality, predicting the crash of the NY Dow or the Nikkei stock average in advance

with pinpoint accuracy is something one could hardly do.

If there were anyone who says, “I anticipated and sold,”

it is mostly because they happened to be short selling and the crash occurred,

and they say so after the fact.

Or they may be someone who keeps both long and short positions at all times,

an approach close to a straddle/arb strategy.

I also agree with the idea of turning crashes into profit.

However, what I mean is to make sure to use the experience from this crash

to define future capital management and rules,

and decide on how to respond to crashes or sudden changes.

This time, those capital management rules were not decided,

and those who expanded their losses in this crash

should prepare by revising capital management and rules for the next crash,

and if they do, it means they can convert the experience from this crash

into profits in the next crash.

As long as you continue investing,

investors will always encounter crashes.

Please transform the experience from this crash into your profits in your own way.

Taking it one step further,

thinking about whether you could have predicted this crash in advance,

or whether you could have sold beforehand,

is, of course, also highly encouraged.

Please become capable of profit even during a crash.