A friend of mine was a pretty active day trader during the dot com days, he used to call it "the only gambling legal in all 50 states" and talked about earnings in units of "Boxters" [1]. Unlike the person in the article he had not invested in real estate or other holdings and so his net worth changed dramatically during the 2000 recession. I always felt it was like a teen who drives recklessly until they almost die in an accident and then can't bring themselves to drive above the speed limit after that.<p>I always felt that being single and without dependents gave him an edge. I was never comfortable not having a really really safe hedge as a stop loss. Of course it could be I was just too chicken to "go big" :-)<p>[1] The Boxter from Porche was going for about $50,000 each at the time.
<i>CIS’s first big score came on Dec. 8, 2005, when someone at Mizuho Securities Co. made a costly typing mistake. Rather than selling a single share of a small recruiting company called J-Com Co. for 610,000 yen, Mizuho offered 610,000 shares for 1 yen each.</i><p>Wow. Such an error could <i>easily</i> have been detected by software before the order went out. Does a professional trading company really not do <i>any order sanity checking at all</i>? I bet they do now, ha :-)
For those unfamiliar with the Yen: it's worth about 2 orders of magnitude less than the major Western currencies. As a rule of thumb, insert a decimal point 2 digits from the right to make figures make more sense.
A couple of important thing to note about the Japanese taxation system for stock capital gains: (1) Japan has no concept of short term vs long term capital gains for stocks. The tax rate is a flat 20% no matter how long you have held the security, and (2) from about 2003-2014, said rate was only 10%. These two factors make personal trading in Japan a potentially much more lucrative affair than in the United States [1].<p><i>>Another day trader, Takashi Kotegawa, who’s known as BNF, made more than 2 billion yen, according to a Bloomberg News report at the time. Efforts to reach Kotegawa were unsuccessful, and it isn’t clear whether he still trades.</i><p>IIRC "BNF" now owns a prominent building in Akihabara (he likely still trades). I forgot the details of the reasoning, but I remember reading something about the purchase about 5 years ago on 2chan.<p>[1] <a href="https://en.wikipedia.org/wiki/Capital_gains_tax#Japan" rel="nofollow">https://en.wikipedia.org/wiki/Capital_gains_tax#Japan</a>
Hm, call me a Luddite or a communist or whatever, but i fail to see how this type of pursuit, broadly speaking, is of any benefit at all to society at large. In fact, i would argue (while simultaneously admitting that i am not an expert / economist, so i am open to comments) that trading this way is dubious to say the least. All i mean is, where is this guy's massive profit coming from? Surely to a certain degree there must be a law of conservation of cash? Is it really only coming from other traders like him, but who in that instance happened to make a bad decision? In other words, i would say it would perhaps not be that bad if the pool of cash from which such traders were fishing were entirely made up of inlay by other such traders, such as would be the case at a casino at a poker table... What i'm trying to enunciate is a vague uneasiness that somehow, making so much cash without contributing anything to society seems... Unfortunate, to say the least? Isn't there something useful somebody like that could do, instead of amassing a fortune by "gaming the market"?<p>I have nowhere near enough knowledge on the subject to suggest a workable method of regulation or anything like that, but i really wonder how something that boils down to somebody gaming the market (as somebody else said, the only gambling which is legal in all states) to the tune of millions is anything but detrimental.
Forgive my ignorance of stock trading. For stocks that do not give dividends, then stock has no inherent value EXCEPT what a buyer thinks they can sell it for later (bigger fool theory)?