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posted by n1 on Monday September 29 2014, @10:31PM   Printer-friendly [Skip to comment(s)]
from the world's-casino dept.

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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  • (Score: 3, Insightful) by Snotnose on Monday September 29 2014, @11:12PM

    by Snotnose (1623) on Monday September 29 2014, @11:12PM (#99825)

    He has bet 15 billion and got back 50 million. That's about a 0.3% ROI. I realize he's gambling smaller amounts of cash in each transaction, but the fact is he has essentially put down $15 bln and got back $50 mln (minus trading fees and taxes).

    He's not an investor, he's a lucky gambler.

     

    --
    Theiyr're - Take that grammar police.
    • (Score: 4, Insightful) by Dunbal on Monday September 29 2014, @11:37PM

      by Dunbal (3515) on Monday September 29 2014, @11:37PM (#99836)

      "He's not an investor, he's a lucky gambler."

      That's what day traders are. Gamblers. 0.3% is a pretty good return for day trading. Usually you're good if you can consistently get 0.2%. I used to be happy with anything above $20 profit per trade (after paying commissions). More than that is just greed. With day trading the object is not to make a lot per trade, but to make many successful trades. $20 is not much, but $20 30 times a day 5 days a week starts to be real money. But no one called him an investor - only you did.

    • (Score: 1) by schad on Tuesday September 30 2014, @12:10AM

      by schad (2398) on Tuesday September 30 2014, @12:10AM (#99845)

      He's not an investor, he's a lucky gambler.

      Except the stock market isn't actually random. The story gives as an example one of his big winners. A company had been down for the past few days and he felt it was due for an upturn. In gambling, that's the gambler's fallacy: the fact that it's been red for the past five rounds does not make it more likely that the next round will be black. In the stock market it might actually be true, and in this case it was.

      • (Score: 0) by Anonymous Coward on Tuesday September 30 2014, @12:19PM

        by Anonymous Coward on Tuesday September 30 2014, @12:19PM (#99960)

        A company had been down for the past few days and he felt it was due for an upturn. In gambling, that's the gambler's fallacy: the fact that it's been red for the past five rounds does not make it more likely that the next round will be black. In the stock market it might actually be true, and in this case it was.

        You do realize that this is exactly the argument used to support the gambler's fallacy, don't you? You've picked out the anecdote where the outcome confirms your pre-existing bias, without telling us how many times a stock that goes down for a few days continues to go down for a few more.

    • (Score: 0) by Anonymous Coward on Tuesday September 30 2014, @02:38AM

      by Anonymous Coward on Tuesday September 30 2014, @02:38AM (#99876)

      No, $15 billion was the total value of his trades. TFA says his brokerage statements show liquid assets between 4.4 and 4.8 billion yen. Divide by 100 and you get $45 million.

    • (Score: 1) by khallow on Tuesday September 30 2014, @03:18AM

      by khallow (3766) Subscriber Badge on Tuesday September 30 2014, @03:18AM (#99888) Journal

      He has bet 15 billion and got back 50 million. That's about a 0.3% ROI.

      In other words, about average for a Las Vegas casino slot machine - the machine, not the monkeys pulling the lever or pushing the buttons. When you can consistently pull in that kind of income over probably tens of thousands of trades, it's not gambling any more.

  • (Score: 2) by hoochiecoochieman on Monday September 29 2014, @11:19PM

    by hoochiecoochieman (4158) on Monday September 29 2014, @11:19PM (#99829)

    He could have learned some useful skills, for a change. Maybe next time.

  • (Score: 3, Funny) by Dunbal on Monday September 29 2014, @11:32PM

    by Dunbal (3515) on Monday September 29 2014, @11:32PM (#99835)

    Someone needs to introduce this guy to EVE Online and see how long he lasts...

    • (Score: 2) by VLM on Tuesday September 30 2014, @12:14PM

      by VLM (445) Subscriber Badge on Tuesday September 30 2014, @12:14PM (#99957)

      Having played UO on a private server and EVE about a decade ago I guarantee he was wasting his time on UO (although he was on UO a decade before EVE was "cool").

      I played EVE for about a month until I got really bored and one of my money making schemes was I was apparently the only guy doing time arbitrage so every freaking night when the USA EUR JA people, or at least the small time noobs, went to bed after an evening of gaming, they'd dump all their ground up asteroids on the market all at once crashing prices. Meanwhile I got awesome high sell prices when these guys weren't dumping. I had all these diagrams and stuff. Overlapping sleep cycles were a problem.

      The hard part wasn't so much making money but making the most money as an optimization game. I'd make "the most money" on a single trade if I bought ground up asteroid at 4am and sold at 5pm every day. But thats only one trade on my capital investment... not a good idea. I made more by buying at 4am selling at 10am buying at 3 pm selling at 4pm or it was something like that. I had spreadsheets and stuff.

      It got real boring after a month or so. Also EVE is hyper-classist or pyramid shaped or whatever so noobs only make 1/100000th the amount old timers made and its very easy to make 50% profit off trading pennies with noobs but I found it difficult and stressful to profit at all when trading $100 bills in 0.0 space with old timers.

      • (Score: 0) by Anonymous Coward on Tuesday September 30 2014, @04:55PM

        by Anonymous Coward on Tuesday September 30 2014, @04:55PM (#100054)

        Having played UO on a private server and EVE about a decade ago

        I found it difficult and stressful to profit at all when trading $100 bills in 0.0 space with old timers.

        OK, the game is just over a decade old. About a decade ago was 2005. At that time, there was no 100sB ISK around floating in trades (not $$). Even today, 100B ISK is not a trivial sum. There is very little trade done at this level - only things like Titans (largest ships) cost close to that much.

        So sorry, I'd call bullshit on your bad recollection of events and amounts.

        As for 50% profit on small items, sure, but you only have so much time in the day to click on orders. 306 per character with max trade skills, if I recall correctly. And if you spend about 10 seconds per order, that is an hour of your time.

  • (Score: 2) by Daiv on Monday September 29 2014, @11:54PM

    by Daiv (3940) on Monday September 29 2014, @11:54PM (#99840)

    UO was, by far, my worst purchase throughout my college days, mid to late 90's. Destroyed my CD rom drive, made me upgrade my modem, twice(!) from a 14.4 to a 28.8 then a 36.6. (56k wasn't available in my budget or area at the time.)

    I learned how to run though, just like described in the summary, even from the first bird I attacked with bare fists when it almost killed me.

    I've learned since then. I'm not going to be betting millions in the stock market anytime in the near future.

    • (Score: 1, Offtopic) by karmawhore on Tuesday September 30 2014, @02:41AM

      by karmawhore (1635) on Tuesday September 30 2014, @02:41AM (#99878)
      oooOOOoOooOOoOOOooOooOO
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      =kw= lurkin' to please
  • (Score: 3, Funny) by Buck Feta on Monday September 29 2014, @11:55PM

    by Buck Feta (958) on Monday September 29 2014, @11:55PM (#99842) Journal

    Apparently the HFT computers are complaining that he has an unfair advantage.

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    - fractious political commentary goes here -
    • (Score: 0) by Anonymous Coward on Tuesday September 30 2014, @02:36AM

      by Anonymous Coward on Tuesday September 30 2014, @02:36AM (#99875)

      *Golfclaps*

      Great, subtle joke, Buck! :D

    • (Score: 2, Interesting) by kaszz on Tuesday September 30 2014, @04:45AM

      by kaszz (4211) on Tuesday September 30 2014, @04:45AM (#99898) Journal

      In some places you can get prosecuted if the trading computers looses because you outsmart their algorithms. And if it goes really wrong their owner gets a trade rollback.. makes your eyes roll......

  • (Score: 2) by PizzaRollPlinkett on Tuesday September 30 2014, @10:54AM

    by PizzaRollPlinkett (4512) on Tuesday September 30 2014, @10:54AM (#99935)

    My first reaction is to wonder if what he did was statistically significant. Compared to, say, trading totally at random, is he accomplishing anything?

    --
    (E-mail me if you want a pizza roll!)
    • (Score: 3, Insightful) by VLM on Tuesday September 30 2014, @12:22PM

      by VLM (445) Subscriber Badge on Tuesday September 30 2014, @12:22PM (#99964)

      Theres an old stock trading scam where you pick some stock, don't matter what. IBM. Then you send 256 telegrams/emails/newsletters to proto-suckers half saying "up" half saying "down". Then next time you send 128 telegrams to the half where you picked right saying "remember me, I said up and it went up? Well today I say..." and half up and half down. Then next time 64, explaining you've been right twice in a row and today I predict....

      Eventually you send like 1 telegrams to 1 sucker claiming "Yo, homie, I have been right 7 times in a row why not wire me a million bucks to invest for you, how can this go wrong?" And then you get your million and take off for south america laughing all the way.

      My guess is "dude" is, in other financial news, opening his own hedge fund or something and looking for investors. Not implying anything... just saying.

      Could be playing it as a time series not over multiple suckers. Imagine you trade for 20 years after UO was a "thing" while living off your trust fund, and the one year you get a profit you very heavily advertise last years results and only last years results, while asking for general investment to be sent to you, meanwhile the learjet to Brazil is warming up as the wire transfers come in... Just saying I've heard this story before.

      Option 3 is shadow accounts, you make 8 identities with 8 accounts and the 7 that lose, well, whatever, as long as you make it up when you advertise the 1 identity that "always wins"

      Of course dude could be legit. Could be.

    • (Score: 0) by Anonymous Coward on Tuesday September 30 2014, @12:43PM

      by Anonymous Coward on Tuesday September 30 2014, @12:43PM (#99971)

      My first reaction is to wonder if what he did was statistically significant.

      I don't think there's any meaningful way of evaluating that. He's clearly made a lot of trades, so it would be tempting to compare the distribution of his profits with a random distribution, but that suffers from selection bias: you're catching him at a particular time when he's "ahead," and for a particularly good year. I suppose you could do some kind of bootstrap - compare subsets of his trades against random - that might be a little more convincing.

      On the other hand, the TSE returned 54% in 2013, so one might question whether his return of 0.3% is actually "ahead." Ignoring the $15B trades, and considering only his available capital of $50M, then his return of $55M is more impressive, but not substantially different than would be expected with conventional leverage and index investing.

    • (Score: 2) by bootsy on Tuesday September 30 2014, @06:07PM

      by bootsy (3440) on Tuesday September 30 2014, @06:07PM (#100067)

      A good trader is right 51% of the time.
      As long as you make equal weighted bets you simply have to be right slightly more than you are wrong.

      Of course most people can make money in a bull market, after all the price just goes up.
      In this case the biggest investor in Japanese equities appears to the Bank of Japan due to "Abenomics". I find this very scary. How will they ever exit their position? Selling even a fraction of it will cause a huge downward move in the market.

  • (Score: 2) by halcyon1234 on Tuesday September 30 2014, @06:26PM

    by halcyon1234 (1082) Subscriber Badge on Tuesday September 30 2014, @06:26PM (#100074)

    Really, SN? We're going with THOSE headlines now? "Learn the ONE WEIRD TRICK this GAMER did to make MILLIONS on the stockmarket"?

    There's 18 items in the queue. I guarantee that if I pick one at random, it'll be better than this. Just did a random roll. 12. Let's open the queue:

    Internet Census 2014 to come? [soylentnews.org]

    There, that's much better. Let's just call this the Hugh Pickens protocol, shall we? If you're about to post something from Hugh Pickens, instead pick a random item from the queue.

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    Original Submission [thedailywtf.com]
    • (Score: 0) by Anonymous Coward on Thursday October 09 2014, @04:19PM

      by Anonymous Coward on Thursday October 09 2014, @04:19PM (#104100)

      Did you learn your selection skills from Ultima Online? Maybe you and him can team up?