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