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Mystery Gamer Makes Millions Moving Markets In Japan

Posted by samzenpus on from the money-diffusion dept.

HughPickens.com writes Jason Clenfield writes in Businessweek that tax returns show that a former video game champion and pachinko gambler who goes by the name CIS traded 1.7 trillion yen ($15 Billion) worth of Japanese equities in 2013 — about half of 1 percent of the value of all the share transactions done by individuals on the Tokyo Stock Exchange. The 35-year-old day trader whose name means death in classical Japanese says he made 6 billion yen ($54 Million), after taxes, betting on Japanese stocks last year. The nickname is a holdover from his gaming days, when he used to crush foes in virtual wrestling rings and online fantasy worlds.

"Games taught me to think fast and stay calm." CIS says he barely got his degree in mechanical engineering, having devoted most of college to the fantasy role-playing game Ultima Online. Holed up in his bedroom, he spent days on end roaming the game's virtual universe, stockpiling weapons, treasure and food. He calls this an early exercise in building and protecting assets. Wicked keyboard skills were a must. He memorized more than 100 key-stroke shortcuts — control-A to guzzle a healing potion or shift-S to draw a sword, for example — and he could dance between them without taking his eyes off the screen. "Some people can do it, some can't," he says with a shrug. But the game taught a bigger lesson: when to cut and run. "I was a pretty confident player, but just like in the real world, the more opponents you have, the worse your chances are," he says. "You lose nothing by running." That's how he now plays the stock market. CIS says he bets wrong four out of 10 times. The trick is to sell the losers fast while letting the winners ride. "Self-control is so important. You have to conserve your assets. That's what insulates you from the downturns and gives you the ammunition to make money."

68 of 113 comments (clear)

  1. See mom? by penguinoid · · Score: 5, Funny

    Let me play games all day and some day I'll be rich!

    --
    Don't waste your vote! Vote for whoever you want, unless you live in a swing state it won't matter anyways
    1. Re:See mom? by phantomfive · · Score: 2

      If he really did make $54 million, then he's more than a kid with ADD. Not even an idiot makes that kind of money on the stock market.

      --
      "First they came for the slanderers and i said nothing."
    2. Re:See mom? by Anonymous Coward · · Score: 1

      So rich that one day, I'll be able to sit inside all day in my own basement!

    3. Re:See mom? by WaterDamage · · Score: 3, Interesting

      Percentage wise he made less than 0.40%!!! The Nikkei stock exchange went up 57% in 2013 in Japan but he only made 0.40% (yes, you see that correctly, less than half of one percent) so no I will not back down from my statement that he is an idiot with ADD. The article does not state how big his trading account is so I had to use the $15 billion total figure for my calculation but nonetheless I'm safely assuming that he must be trading with a few hundred million dollars alone to reach trillions in trading volume.

    4. Re:See mom? by sumdumass · · Score: 1

      And you can move your mom in upstairs rent free to thank her for all the time she let you live in her basement.

    5. Re:See mom? by phantomfive · · Score: 1

      The article suggests he started with 10,000 a decade ago. If he did that, then he's impressive.

      However, there's not really much evidence, and he might as well have inherited it. In which case, you have a point.

      --
      "First they came for the slanderers and i said nothing."
    6. Re:See mom? by oji-sama · · Score: 1

      Percentage wise he made less than 0.40%!!! The Nikkei stock exchange went up 57% in 2013 in Japan but he only made 0.40% (yes, you see that correctly, less than half of one percent) so no I will not back down from my statement that he is an idiot with ADD. The article does not state how big his trading account is so I had to use the $15 billion total figure for my calculation but nonetheless I'm safely assuming that he must be trading with a few hundred million dollars alone to reach trillions in trading volume.

      Why is that a safe assumption? 15000000 / 54000000 = ~278. Thus one 54 million trade a day is way more than enough to get high trade volume. 41 trades one million dollar each a day would also be enough. I would guess the actual trade amount would be somewhere between those values.

      Unless I managed to fail my calculations.

      --
      It is what it is.
    7. Re:See mom? by khallow · · Score: 1

      so no I will not back down from my statement that he is an idiot with ADD.

      A wealthy idiot who probably made more in ten years trading stocks than you'll make in several lifetimes. If the "idiot" achieves by their actions a considerable gain (be it money or not), then maybe you should reconsider whether the term is appropriate.

    8. Re:See mom? by ShanghaiBill · · Score: 2

      The article does not state how big his trading account is so I had to use the $15 billion total figure for my calculation

      This is almost certainly wrong. You don't need $15B to make $15B in total turnover. He could be buying and selling hundreds of times a day, or tens of thousands of times a year, rolling over the same money.

      I'm safely assuming that he must be trading with a few hundred million dollars alone to reach trillions in trading volume.

      The "trillion" refers to yen, which are worth less than a penny each.

    9. Re:See mom? by retchdog · · Score: 2

      there really is no baseline here for a meaningful comparison, and some people do just get lucky. there's that old joke about applying to work for N banks and making a different prediction about a fixed set, S, of stocks to each one; if N=2^|S|, you'll sweep one of them, guaranteed.

      having a large liquidity pool also simply lets you make high-risk investments that others literally can't. there's nothing intrinsically wrong with this, but neither should you conclude that individual merit is the driving factor.

      the article is a puff-piece. the better question to ask about articles like this is "why are they making a big deal out of it right now?". you sometimes get some interesting and disturbing connections, especially when the correlations unfold in the following few months. it rarely has much to do with the putative content.

      --
      "They were pure niggers." – Noam Chomsky
    10. Re:See mom? by Taco+Cowboy · · Score: 1

      ... then he's more than a kid with ADD ...

      Of course that guy is much more than that

      Here are the quotes which I copied from TFA:

      Buy stocks that are being bought, and sell stocks that are being sold>

      Forget the fundamentals - TUNE OUT THE NOISE

      Get out of the hive mindset and bet against the crowd

      And I might like to add that the techniques that the guy applied in his stock trading can be used in other fields as well --- such as, finding a niche, or starting your business, or getting yourself promoted

      When the hive goes West and you are one of those going the same direction, you ain't gonna get much out of it

      --
      Muchas Gracias, Señor Edward Snowden !
    11. Re:See mom? by khallow · · Score: 2

      there's that old joke about applying to work for N banks and making a different prediction about a fixed set, S, of stocks to each one; if N=2^|S|, you'll sweep one of them, guaranteed.

      Except that the cost of making each bet is just the effort to fill out the application. Here, the guy had to put in their own money in on each bet they made. And as a result, they ended up $54 million ahead just last year and they've apparently have been doing well for a ten year period.

      This is a rather consistent result over probably tens of thousands of trades. What burns people like this is not that they were somehow one of the few lucky people out of far more people than exist in the world today, but rather that they tend to underestimate the low frequency risks to such trading.

      If you are betting using a huge amount of borrowed money (this guy probably is operating on a fair amount of margin given how much wealth growth he claims to have created), then it doesn't take much bad luck or fail to erase your entire holdings.

    12. Re:See mom? by phantomfive · · Score: 2

      That advice is basically as generic in the stock market as, "buy low sell high." Actually getting it done is the hard part.

      --
      "First they came for the slanderers and i said nothing."
    13. Re:See mom? by rtb61 · · Score: 2

      Regardless the individual or corporate day, hour, minute traders are toxic to the corporate market and the destructive influence they have on the management of corporations.

      Two things need to radically change, stamp duties on share transaction need to rise to at least 1% to slow down the desire to trade and the speed of transfer of shares need to be slowed down, so to at least 30 or even 90 days between the the purchase and sale of shares. This will hugely stabilise the share market and have a major influence on the management of companies and the desire to fabricate an illusion about the wealth of a company for short term share gains.

      A push needs to be made to shift value of investment in shares from short term capital gains back to dividends and transaction taxes along with hugely slowed down trades will do that.

      --
      Chaos - everything, everywhere, everywhen
    14. Re:See mom? by WaterDamage · · Score: 1

      This is almost certainly wrong. You don't need $15B to make $15B in total turnover. He could be buying and selling hundreds of times a day, or tens of thousands of times a year, rolling over the same money.

      You must factor in the time settlement of funds. Even as a day trader or HFT trader, you are subject to the T+3 day settlement rule . So if he only had a small trading account with $1,000,000 ($1 Million) dollars he would be able to trade that entire $1 million dollars less than 100 times per year with that amount of money due to the T+3 funds settlement rule. So if you do the math, it would not add up to $15 billion in volume.

      Actually, we can speculate that he likely had a trading account with $150,000,000 ($150 million dollars) since that sized account would be able to come close to hitting $15 billion dollars in trading so from this number we can safely speculate that his real gain could have been 33%. While impressive for a trader, he definitely did not beat the market since the market went up by 57% so he traded like a mad man trying to play games in the market only to have the market beat him by a whopping additional 24%!

    15. Re:See mom? by WaterDamage · · Score: 1

      The article suggests he started with 10,000 a decade ago. If he did that, then he's impressive.

      I see no mention of the $10,000 anywhere in this article. Actually the article does not state how much money he had to trade with so unless you have a source we have no idea how big the account was. According to my speculation he likely had $150,000,000 ($150 million dollars) since that sized account would be able to come close to hitting $15 billion dollars in trading per year. Please note that if you factor in T+3 days to settle funds between trades he likely traded less than 100 times in a 365 day cycle.

    16. Re:See mom? by WaterDamage · · Score: 1

      According to my speculation he likely had $150,000,000 ($150 million dollars) since that sized account would be able to come close to hitting $15 billion dollars in trading per year. Please note that if you factor in T+3 days to settle funds between trades he likely traded less than 100 times in a 365 day cycle. so from this number we can safely speculate that his real gain could have been 33%. While impressive for a trader, he definitely did not beat the market since the market went up by 57% so he traded like a mad man trying to play games in the market only to have the market beat him by a whopping additional 24%!

    17. Re:See mom? by phantomfive · · Score: 4, Insightful

      Please note that if you factor in T+3 days to settle funds between trades he likely traded less than 100 times in a 365 day cycle.

      Come on man, at least read the headline of the article, "Made More Than 1 Million Trades". You often don't have to wait for the three day period to trade again if you have a margin account (surely he does), and it typically only takes a day for my trades to settle.

      I see no mention of the $10,000 anywhere in this article.

      From page 2: "his fortune snowballed, starting with 1 million yen -- about $10,000 -- in 2000."

      Actually the article does not state how much money he had to trade with so unless you have a source we have no idea how big the account was.

      From the article: "Those brokerage statements, from SBI Holdings Inc., showed liquid assets ranging from 4.4 billion yen to 4.8 billion yen."

      --
      "First they came for the slanderers and i said nothing."
    18. Re:See mom? by phantomfive · · Score: 1

      btw, here's another good tip:

      When you are highly confident that the stock will go your direction, invest a lot.
      When you have medium confidence of the stock direction, invest a medium amount,
      When you have low confidence in the stock direction, invest a small amount.

      --
      "First they came for the slanderers and i said nothing."
    19. Re:See mom? by radl33t · · Score: 1

      uh yeah or he was trading on margin like any trader does.

    20. Re:See mom? by khallow · · Score: 1

      If 10000 daytraders start out with 10000 dollars each and assuming zero sum game one of them is going to end up with a hundred million.

      Doesn't work that way unless everyone does all or nothing bets. My view is that it's more likely to stabilize with each one tending to hold a portion with the more competent tending to be the wealthier and portions stabilizing where investment opportunities tend to taper off.

    21. Re:See mom? by TheMathemagician · · Score: 1

      He probably made ~50 bps pre-tax then which is pretty solid. I think 10-20 bps is considered normal in the FX world (although they have larger notionals). He isn't trading with a few hundred million dollars. He's a "day trader" or in his case more of a "minute trader". He'll be flat every day and be constantly going in and out of stocks making dozens of trades a day trying to cut losses immediately and let profits run. I'm guessing he's a very short-term momentum player and his individual trades mightly "only" be around $100,000 but he'll be putting on a flurry of them as the price moves his way and covering himself with stops.

    22. Re:See mom? by khallow · · Score: 1
      The previous AC was speaking of stock markets. Those are relatively free.

      In the absence of a free market, government sets the precedent that it's ok to violate the rights of others to further one's own interests. Being successful under such conditions is not a good indicator that one is intelligent or competent (i.e not an idiot), but whether one possesses the same traits as a psychopath - willing to exploit whatever loophole that exists, violating any rights that gets in the way, ignore the loss of liberty for all. "I got mine, screw yours"

      While I agree, I don't see the connection to the discussion of day trading. It's obviously not particularly moral, but it's not taking candy from babies either. And if this guy is as good at it as he claims, then that's a better thing to be doing from his bedroom than a lot of stuff I can think of. As to his mental outlook, I think that's actually two useful lessons for us all.

      First, knowledge learned in one area can be applied elsewhere sometimes in surprising places or ways. Who knew that playing a game could help you become a vigorous trader on a stock market? Well, now we know.

      Then there's the mental attitude he speaks of. It takes a considerable mental adjustment to be able to accept such a high rate of failure as routine and develop a feeling for when something has failed or succeeded to the point of abandonment. Sure, it's not so great an outlook for child-rearing, but there's plenty such as trade or commerce of just about anything, where this is a useful approach.

    23. Re:See mom? by KamikazeSquid · · Score: 1

      It said he made "about half of 1 percent of the value of all the share transactions done by individuals on the Tokyo Stock Exchange." That's not the same thing.

    24. Re:See mom? by khallow · · Score: 1

      Day traders profit off of the day to day fluctuations of the market, and government policies can and does have both immediate and systematic effects on those fluctuations.

      Lots of things can cause fluctuations even the entry of new players or someone deciding to change the size of their investment in a corporation. Government interference is far from unique in this regard.

      While it is true what day traders do isn't rape and pillage, the analogy I would equate to is accepting stolen or counterfeit goods.

      This analogy doesn't make sense at all to me. I don't see that it is any better to pretend a government policy or regulation change didn't happen.

      What I was saying is those things are not signs of not being an idiot, but signs of not having much empathy.

      Which is part of the lesson IMHO. Training like this can help you turn off empathy when it is inappropriate and/or unhealthy for you.

  2. Re:Buy low, sell high by Great+Big+Bird · · Score: 1

    or Sell Short, Buy Low

  3. It doesn't take a genius by WaterDamage · · Score: 1

    Exactly, it's likely he would have done better just from staying long rather than trading. Lets just see how well he does in a down year.

  4. See mom? by WaterDamage · · Score: 1, Flamebait

    He sounds like a kid with serious ADD trading stocks just to kill time and pretend that he actually knows what the hell he's doing. The market in Japan is up, only an idiot could lose money in a up year. Let's see how well he does when the big boys cash out of the musical chairs games at lightning speed with their HFT algorithms and leave him and the rest of the Muppets holding the bag.

  5. Largest Ponzi Scheme Ever by Art+Challenor · · Score: 3, Insightful

    So, no studying PtoE, company fundamentals, etc. etc. Further proving that the Stock Market is almost entirely disconnected from the underlying companies. Basically, it's a Ponzi scheme.

    The US government would have invested Social Security in the Stock Market, but they can't find a spokesperson from the financial industry you can advocate the scheme without drooling at the prospect.

    1. Re:Largest Ponzi Scheme Ever by Anonymous Coward · · Score: 2, Funny

      The Republicans would have invested Social Security in the Stock Market, but they can't find a spokesperson from the financial industry you can advocate the scheme without drooling at the prospect.

      Fixed that for you.

    2. Re:Largest Ponzi Scheme Ever by Concerned+Onlooker · · Score: 4, Interesting

      "Further proving that the Stock Market is almost entirely disconnected from the underlying companies."

      Exactly. I've been wondering for some time just what IS stock price based on? Since it's not based on the soundness of the company (the company doesn't even need to have a P/E!) it seems entirely based on perceived potential of the company and whatever news makes the traders nervous or ecstatic that day.

      Therefore, it seems to me you're better off avoiding fundamentals and instead watching the news and reading sociology books. Oh yeah, and developing ways to do high volume trading one millionth of a second faster than you competitor.

      --
      http://www.rootstrikers.org/
    3. Re:Largest Ponzi Scheme Ever by mc6809e · · Score: 4, Insightful

      So, no studying PtoE, company fundamentals, etc. etc. Further proving that the Stock Market is almost entirely disconnected from the underlying companies. Basically, it's a Ponzi scheme.

      This is true mostly for new or trendy companies in trendy spaces. Boring companies that have been around for a long time are often priced based on the future dividends they're expected to pay. They don't get any attention, though, because those that make money on speculating can't make any money by trading them. The speculators and brokers don't want people paying attention to fundamentals. Volumes would plummet so how would they make money? There would be no churn. And then they'd have to sell the million dollar Manhattan apartment where they keep their mistress.

      It's similar to the difference between trading Beanie Babies (or whatever faddy collectible is popular now) and something like wheat.

      The US government would have invested Social Security in the Stock Market, but they can't find a spokesperson from the financial industry you can advocate the scheme without drooling at the prospect.

      The US government already invests that money by spending it and leaving a bond in its place.

      And how did they invest it? Well, there are some big craters in Iraq and Afghanistan now. Bingo halls and casinos also seem to have profited.

    4. Re:Largest Ponzi Scheme Ever by Kjella · · Score: 1

      Well, the company itself is only one piece of the puzzle. They're also connected to vendors, customers, competitors, their particular market and the general economy. All of those give a lot of impulses into the system, if your competitor launches a great new product that's bad for you. If your vendor's got supply problems, that's bad for you. If your customers for some reason get mad at you that's bad for you. If they suddenly want something else like tablets instead of your laptops that's bad for you. Growth and recession drags the entire economy up and down. The effects ripple through like waves in a pond and it's never still. Just because there's waves on the surface doesn't mean the tide stops coming in, but if you measure from the bottom of one wave to the top of the next then it might go against the fundamentals. They exist if you're investing in a far longer horizon where today's waves are of no real significance, in the long term the companies that make money go up and the ones who lose money go down.

      That said, belief is often more powerful than the fundamentals until the illusion cracks. For example take the dotcom boom, as long as everyone thinks it's a boom they hold on to their stocks. If it dips, they think now they're getting value and buy more. That happens until the bad news overwhelm the value buyers and the stock really start tanking, which again leads to a stampede out. At every step of the way there's people trying to be ahead of the market, but the day traders don't really influence the long term stock price. They're just there trying to make a margin on the market over-reacting/under-reacting or not grasping all the interrelations at play.

      --
      Live today, because you never know what tomorrow brings
    5. Re:Largest Ponzi Scheme Ever by alexander_686 · · Score: 4, Informative

      As Warren Buffet says, in the short run the stock market is a voting machine, in the long run a weighing machine.

      In the long term, the value of a stock is it's future free cash to shareholders, discounted by time and
      risk. Over time this has been proven to be true. P/E is backwards looking, so the fact that you can find a few companies without P/E ratio doesn't prove much. (but yes, it is easier to model and discount cash flows when you have a stable and positive P/E ratio.)

      Short run – yeah – the market runs off on supply and demand, and tends to go with what is popular.

    6. Re:Largest Ponzi Scheme Ever by ShanghaiBill · · Score: 1

      So, no studying PtoE, company fundamentals, etc. etc. Further proving that the Stock Market is almost entirely disconnected from the underlying companies.

      It proves no such thing. Of course PE ratios and fundamentals are important, but other people are doing it for him. He just follows their lead.

      Basically, it's a Ponzi scheme.

      You either have no idea how the stock market works, no idea what a Ponzi Scheme is, or both.

    7. Re:Largest Ponzi Scheme Ever by khallow · · Score: 1

      So, no studying PtoE, company fundamentals, etc. etc. Further proving that the Stock Market is almost entirely disconnected from the underlying companies. Basically, it's a Ponzi scheme.

      Time scale matters. Long term considerations are completely irrelevant when you won't hold a stock long enough for them to matter. Meanwhile if you're planning to buy and hold for a long time, you shouldn't be trying to time the market or making a lot of trades.

      Rather than the silly argument that something is a Ponzi scheme just because one guy profits from a completely different approach to investing than you would take, recognize that it takes a peculiar skill set and effort/focus to be good at any sort of market making or other short term trading. This guy happens to have those skills and to take the effort.

      The US government would have invested Social Security in the Stock Market, but they can't find a spokesperson from the financial industry you can advocate the scheme without drooling at the prospect.

      Instead, we have what would, if it were an attempt at investment, be a guaranteed money loser for anyone putting in now, with a built in huge incentive for the federal government to cut back on future benefits in order to pay current benefits. That's the real Ponzi scheme.

      And in the process, Social Security as it currently stands lessens ownership of capital (none of that money enables the Social Security pensioner to own even a little bit of a company or other capital), which unlike labor is not declining in value, while dumping that money in the hands of special interests who pick up public funding. Plenty to like about that scheme.

    8. Re:Largest Ponzi Scheme Ever by arobatino · · Score: 1

      In the long term, the value of a stock is it's future free cash to shareholders, discounted by time and
      risk.

      The magic phrase is Dividend discount model.

    9. Re:Largest Ponzi Scheme Ever by alexander_686 · · Score: 1

      Nope. The magic phrase is Future "Free Cash Flow" (FCF ) to Shareholders.

      Now, how do you model FFC? Do you care if a company pays out dividends or takes the same cash and does a stock buy back? The only difference between the 2 methods is because of differences in taxes - and maybe some psychological signaling. When does it matter if a company stops paying a dividend but reinvests those earnings into new projects?

      The Dividend Discount Model is a classic model but is one of the simpler ones. I prefer models that use earnings, not dividends. This allows to figure out what I should be paying for a company that has profits but does not pay out a dividend, like Amazon or Google.

      .

    10. Re:Largest Ponzi Scheme Ever by TheMathemagician · · Score: 1

      Imagine watching a successful surfer and then claiming that, as he hasn't studied Meteorology, Fluid Dynamics or Oceanography, the height of the waves is almost entirely disconnected from the underlying sea level. He's just a short-term momentum player riding the random froth on the waves. The stock market is completely unaffected by these traders just as sea-level is unaffected by surfers.

    11. Re:Largest Ponzi Scheme Ever by volmtech · · Score: 1

      With time to kill I took my SS statement and calculated the return from investing my contribution in the DOW on the first trading day of the last 40 years. My one hundred forty thousand dollars would now be worth over six hundred fifty thousand. I did the same buying gold with the same return. Do the same with Apple stock, you might feel sick.

  6. New game title by Tablizer · · Score: 1

    War & Buh Fett

    --
    Table-ized A.I.
  7. What's good about 4 out of 10 times wrong? by jtara · · Score: 2

    | CIS says he bets wrong four out of 10 times.

    That's not at all impressive.

    Good trading strategies can return positive results if you bet wrong more than half the time. I'd be impressed if he can bet wrong 9 times out of 10, and still make a profit.

    1. Re:What's good about 4 out of 10 times wrong? by jtara · · Score: 1

      It's nice if you're right.

      It's even nicer if you can make money even if you are wrong.

      And better still if you can make money while being wrong most of the time.

      You are mistaken if you think making money trading equities has anything to do with being right.

      While I am out of the game (partner who was responsible for all expenses wouldn't spend on infrastructure improvements - my mistake was not kicking in from my own share of profits... he did not understand simple physics, and could not convince him it was a war of escalation) I did high-frequency trading from 1999 to 2003. When you are holding for milliseconds, you don't care about right or wrong. You care that your winners out-run your losers. We did thousands of trades every day, and made money nearly every day. Probably a handful of days when we had a loss and don't think we ever sustained a weekly loss. Certainly never a monthly one. We had no opinion on direction of the market or direction of the stock. All we cared is that our opening position (long or short) had some advantage.

    2. Re:What's good about 4 out of 10 times wrong? by RuffMasterD · · Score: 1

      Oh yeah? The best strategy can bet wrong up to 11 times out of 10, and still make a profit.

      --
      Human Rights, Article 12: Freedom from Interference with Privacy, Family, Home and Correspondence
  8. Nothing special in Stock market by QuantumReality · · Score: 1

    If you think that stock brokers and big wall street companies have something you don't have then you are wrong. There is no magic in it, there is no hidden, secret formula. It's about watching news and reading quarterly financial reports of companies. If company made a lot more in that quarter then EVERYONE knows that the stock will go up.. so everyone buys making the stock go higher... Anyway this is for average Joe.. 97% of profits from stock market in big companies from wall street are from high frequency trading.

    1. Re:Nothing special in Stock market by kruach+aum · · Score: 1

      http://lmgtfy.com/?q=high+freq...

  9. Re:It doesn't take a genius by vux984 · · Score: 5, Interesting

    Nevermind the selection bias.

    I mean, maybe its like interviewing lottery winners and asking them what their secret is. Maybe the secret is simply "I played", and "somebody has to win".

    I'm not saying the guy isn't smart or disciplined or has the right mindset to be a trader, but that doesn't mean he's really an "exceptionally" genius at it.

    Literally millions of day traders out there doing technical analysis and picking stocks. Its a bit like monkeys and typewriters in a way. Does the monkey that produces something legible really have any truly special talent?

  10. PRODUCTIVE ECONOMY by Jeremiah+Cornelius · · Score: 2

    Useful means of production and tangible assets of benefit, with intrinsic value.

    --
    "Flyin' in just a sweet place,
    Never been known to fail..."
  11. halfway there by PopeRatzo · · Score: 1

    I've got the playing video games and gambling all day part down. Looking forward to the billions pouring in.

    --
    You are welcome on my lawn.
  12. Re: Lousy return by stdarg · · Score: 5, Informative

    No.. $15 billion volume not investment. He could have started with 1M and traded 15000 times.

  13. Quotes are useful by wonkey_monkey · · Score: 2

    whose name means death

    That would sound a lot less sinister if you'd put quotes around the word "death."

    control-A to guzzle a healing potion or shift-S to draw a sword, for example — and he could dance between them without taking his eyes off the screen.

    He can hit Ctrl-A and Shift-S without looking? The man's a wizard!

    --
    systemd is Roko's Basilisk.
  14. Risk of ruin by mc6809e · · Score: 1

    He seems to have intuited this.

  15. Isn't random 50%? by khasim · · Score: 1

    So he can hit 6 out of 10.

    Wouldn't random chance give him 5 out of 10?

    And that's not even factoring in whether his comments are correct. And most people do NOT give accurate reports of their own winning/losing patterns.

    And his self-reported "strategy" is to buy what other people are buying and to sell when they sell.

    So who is selling when he is buying? Wouldn't he constantly be behind the curve? Paying too much for the stock and selling for too little?

    1. Re:Isn't random 50%? by alexander_686 · · Score: 4, Informative

      So who is selling when he is buying? Wouldn't he constantly be behind the curve? Paying too much for the stock and selling for too little?

      You are touching on one of the great debates. Momentum trading is one of those anomalies that should not work in theory but does in practice. Why? Ideas have been kicked around for the last 20 years. Here is a link to a possible explanation.

      http://www.economist.com/news/...

  16. Re: Lousy return by angel'o'sphere · · Score: 1

    As far as I understood it, he is doing that for more than a decade.
    So 15000 trades goes down to 1500 per year which means roughly 5 per day.
    Ha! Math makes live so easy!

    --
    Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
  17. Is CIS authentic Japanese name? by 140Mandak262Jamuna · · Score: 1

    All the Japanese proper nouns end in a vowel or "n". Right?

    --
    sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
    1. Re:Is CIS authentic Japanese name? by tomhath · · Score: 1

      They're also in Japanese, not English.

  18. Re:A direct quote from Warren Buffett by WaterDamage · · Score: 1

    ummmm, I really hate it when anyone makes stupid generalizations without explaining anything. Te whole point of trading, finding winners. How do you know you have a winner or just bought a falling knife? BTW, Buffet does use price targets almost every-time. As a matter of fact Buffet has been known to wait 15 years to buy a stock at the right price just to ensure he's not overpaying. Obviously you've never studied how he buys stock so you're just spewing complete garbage.

  19. Re:Survivorship Bias by ledow · · Score: 1

    More directly, any sort of winning on a "bet" you make has to come from somewhere. Some guy loses out, or some stock exchange gives you money that it's inevitably getting from someone else as they lose.

    Gambling, or trading, overall, is not a zero-sum game. Your earnings have come from someone else's loss - PLUS commission. The guys earning commission are raking it in with little or no loss. But the guys the other end - they are the ones "giving" you that money, one way or another. Maybe via third-parties, maybe from their own companies, maybe from their own mistakes, maybe just in allowing the stock exchange to balance out and be profitable to operate while you're winning on the other, but the money has come from somewhere. It didn't magic out of thin air.

    Vegas and lotteries are the same. Yeah, you might win a million. The million came from some other MORE THAN ONE MILLION poor saps each spending one (of whatever currency) trying to win the million. And nothing is guaranteed. If you have a brain you stop once you've won big. To keep going is not only a sign of greed, but a sign of some stupidity. Before long, the tide will turn and if you're stupid you'll spend whatever you have left hoping that the next hand will fall your way.

    So you only ever hear of people winning big - and then never hearing of them again, or winning big and then stopping playing. The "I pissed away millions" story just makes people think you're a stupid fucker, so it's not that those stories don't exist or aren't heard, it's that nobody has any sympathy for *that* guy.

    Similarly for all those celebs who were earning millions and then have to declare themselves bankrupt. It's news both ends. But if you're wanting to make it big, you won't care about the second story because "you're not that stupid".

  20. Re:Buy low, sell high by alexander_686 · · Score: 1

    Which is a momentum strategy. There are plenty of hedge fund that plays that game.

    And that works just fine on the short side as well. You sell short what people are selling. That is hard to do when there is a up-tick rule in place, but I don't know if Japan has that rule or not.

  21. Re: Lousy return by khallow · · Score: 1

    More like 10 per day. Banker holidays.

  22. Re:It doesn't take a genius by fafaforza · · Score: 1

    You guys make it sound like making millions in the stock market is dead simple. All your posts are missing is a link to an ebook that tell you all the secrets.

    Maybe downplaying his gains makes you feel better about yourselves? But making that kind of scratch doesn't happen by change. Even best advisors from open hedge and mutual funds average around 25%.

  23. Re:Half of one percent by fafaforza · · Score: 1

    Numbers less than 10 are generally spelled out, and it was after a hyphen, and there is a rule about spelling out numbers at the beginning of the sentence, which might kinda apply here.

  24. Re:It doesn't take a genius by retchdog · · Score: 2

    it's not simple, but neither is it extremely difficult. the factors he cites are important, and sang froid is much more important than technical analysis if you're playing with your own money. however, from one example you can conclude basically nothing.

    if just 1,000 people all invested their entire savings in a single double-zero roulette roll, you're almost guaranteed to have a few very lucky winners. does this mean it was a good idea? and is it that unreasonable to think there are about 1,000 similar people who tried exactly what this person did, and failed?

    --
    "They were pure niggers." – Noam Chomsky
  25. Re:It doesn't take a genius by allcoolnameswheretak · · Score: 1

    I think what people mean is that daytrading has much in common with gambling. And there are a lot of gamblers. One of them is bound to win the lottery at some point, thanks to pure chance and luck. The difference is, if you win at the stock market, people think you are smart, and write articles about you.

    I tend to see it both ways. If you are smart and know what you're doing, you can give your luck some nudges in the right direction, but you will still need to be lucky to succeed.

  26. Re:It doesn't take a genius by vux984 · · Score: 2

    You guys make it sound like making millions in the stock market is dead simple. All your posts are missing is a link to an ebook that tell you all the secrets.

    Its not dead simple at all I know this, and there aren't really any real secrets either. The point stands that if someone beats the market by a lot its probably more luck than brains.

    Its like blackjack or poker. The people who 'win' are generally good players, understand the game, are disciplined, etc. I'm sure this guy is all of these things. But winning big? Its just luck. Every trade is a calculated risk -- and probability theory dictates that if you have a bunch of traders all doing this, some will break even, some will lose it all, and some will win big... even if they all play EXACTLY as well as each other. Its just math.

    In fact, day trading as a profession is a fanscinating selection bias -- as some of them lose they stop trading so the ones that are still doing it are the ones who haven't lost yet so any survey of the field at any time is mostly people who are "doing ok or better". (Because anyone doing poorly has had to dropped out.)

    Of course some are better at it than others, and the ones who aren't good at it are more likely to lose and be forced to drop. So the ones still doing it are at least 'good at it'. And as I said, I don't doubt that this person is good at it. But spectacular success is as much luck as anything.

    To put it another way...

    Lets say I put an opportunity in front of you and you correctly determine the risk as being 1% chance to quadruple your money, 20% chance of doubling your money, 20% chance to triple it, 49% chance of breaking just above even, 9% chance of losing 50%, 1% chance of losing it all.

    Clearly this is a very good bet. 90% of the outcomes are positive, and overall its very net positive. It would be smart to take this bet. So if I present this to a few hundred traders... what happens?

    A couple quadruple their money. Are they any smarter or more insightful than the few who lost it all? Why? They all correctly gauged the risk and made the best decision.

    I've found that people fundamentally do NOT understand "risk". Whether its the stock market, gambling, their own health care, or IT related risks.

    This guy is good at analyzing risk and making smart bets, and he's had good winning streak, but being right about the risk and making the best decisions based on it, doesn't mean the risk isn't there. That he didn't lose is just luck.

    Poker is the same way. You can be smart, play well, know all the odds, make all the right calls, and still lose badly.

    Even best advisors from open hedge and mutual funds average around 25%.

    Hell no they don't. Lots of studies have shown that the top hedge funds don't even consistently beat index funds. And after the management expenses the investor usually ends up behind. Look it up.

  27. Re:It doesn't take a genius by Kittenman · · Score: 1

    You guys make it sound like making millions in the stock market is dead simple. All your posts are missing is a link to an ebook that tell you all the secrets.

    Maybe downplaying his gains makes you feel better about yourselves? But making that kind of scratch doesn't happen by change. Even best advisors from open hedge and mutual funds average around 25%.

    Count the hits, ignore the misses. Maybe he was just lucky. And yes, someone can be that lucky. People win lotteries (not me!). And slashdot wouldn't have an article along the lines of "Several normal people played the stockmarket and on average did so-so".

    --
    "The greatest lesson in life is to know that even fools are right sometimes" - Winston Churchill
  28. This lesson is from the game of go by wad4ever · · Score: 1

    If you play the go (the Asian boardgame), you quickly learn how important it is to "cut and run". The critical skill is to identify, as soon as possible, whether or not something is going to work out. And if not, IMMEDIATELY stop investing resources into that venture, and shift to something that has potential.

    --
    --- wad