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Japan The Almighty Buck Games

Mystery Gamer Makes Millions Moving Markets In Japan 113

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."
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Mystery Gamer Makes Millions Moving Markets In Japan

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  • See mom? (Score:5, Funny)

    by penguinoid ( 724646 ) on Sunday September 28, 2014 @01:48PM (#48014911) Homepage Journal

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

    • See mom? (Score:1, Flamebait)

      by WaterDamage ( 719017 )
      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.
      • 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.
        • Re: (Score:3, Interesting)

          by WaterDamage ( 719017 )
          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 vo
          • 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.
            • 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

              • Re:See mom? (Score:5, Insightful)

                by phantomfive ( 622387 ) on Monday September 29, 2014 @12:32AM (#48017311) Journal

                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."

          • 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.

            • 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
          • by khallow ( 566160 )

            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.

            • 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.

              • by khallow ( 566160 )

                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

          • 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.

            • 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

          • by rtb61 ( 674572 )

            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 infl

          • 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 "on
          • 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.
        • ... 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

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

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

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

  • by Art Challenor ( 2621733 ) on Sunday September 28, 2014 @02:11PM (#48015005)
    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.
    • Re: (Score:2, Funny)

      by Anonymous Coward
      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.
      • 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.
    • by Concerned Onlooker ( 473481 ) on Sunday September 28, 2014 @02:55PM (#48015199) Homepage Journal

      "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.

      • by Kjella ( 173770 )

        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. Grow

      • by alexander_686 ( 957440 ) on Sunday September 28, 2014 @04:46PM (#48015673)

        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.

        • 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 [wikipedia.org].

          • 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

    • by mc6809e ( 214243 ) on Sunday September 28, 2014 @03:29PM (#48015319)

      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.

    • 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.

    • by khallow ( 566160 )

      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 sor

    • 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.
  • War & Buh Fett

  • by jtara ( 133429 ) on Sunday September 28, 2014 @02:23PM (#48015063)

    | 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.

    • 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?

    • by jtara ( 133429 )

      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

    • Oh yeah? The best strategy can bet wrong up to 11 times out of 10, and still make a profit.
  • He bet 15 billion and made 50 million. That's about a 0.3% ROI, which IMHO falls into the noise range. Guy is more lucky than good.
  • 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 frequ
  • I've got the playing video games and gambling all day part down. Looking forward to the billions pouring in.

  • by wonkey_monkey ( 2592601 ) on Sunday September 28, 2014 @02:54PM (#48015197) Homepage

    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!

  • He seems to have intuited this [wikipedia.org].

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

Trying to be happy is like trying to build a machine for which the only specification is that it should run noiselessly.

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