https://t.co/CahGF3EREm [Stock Investing] What Losing Investors Always Do! Those Suffering Heavy Losses Should Stop Doing This Immediately by Masaki Uoka [MBA Holder, 31 Published Business Books] #AISummary A Strategy to Turn Market Crashes into Allies and Build Assets Worth ¥100 Million 🔳 Investors who significantly grew their wealth have consistently used market crashes as opportunities to buy high-quality stocks at discounted prices, rather than fleeing from sharp declines. 🔳 Assume market crashes will continue to occur. Since declines of 20% or more often force individual investors to cut losses or exit the market entirely, it’s crucial to prepare to transform crashes from crises into opportunities. 🔳 Prioritize stock investing as a hedge against inflation. Japan has experienced inflation of around 3% or higher since 2022; holding only cash erodes real purchasing power, making returns that outpace inflation essential. 🔳 Example of ¥1 million purchasing power erosion: If inflation remains at 3–4% for five years, the real value of ¥1 million today will drop to approximately ¥860,000—demonstrating that holding cash carries risk. 🔳 Clearly define your investment goals first. Determine why you’re investing in stocks, how much capital you need, and by when you aim to achieve it. Build a roadmap backward from your target. 🔳 Set incremental goals toward ¥100 million. For example, grow from ¥5 million to ¥10 million, then ¥10 million to ¥20 million, then ¥20 million to ¥40 million—building wealth step by step with intermediate milestones. 🔳 Additional capital contributions are a vital part of asset building. Don’t obsess over growing ¥100 million solely through trading small amounts; once you’ve developed solid investment skills, it’s reasonable to inject additional funds from salary or savings. 🔳 Avoid over-investing in the early stages. Injecting large sums before gaining sufficient experience and the ability to manage capital properly can amplify losses—wait until you’ve built experience before increasing your investment size. 🔳 Don’t invest based solely on others’ recommendations. Relying on others’ opinions prevents you from developing independent judgment and consistent strategy, making you more likely to panic-sell during price declines. Critical thinking in your investment decisions is essential. 🔳 Evaluate your own investment results. Only by selecting your own stocks can you effectively reflect on why they rose or fell, enabling continuous improvement of your judgment and strategy. 🔳 Take full responsibility for your investment decisions. Investing based solely on others’ advice makes it easy to blame external factors when losses occur. You must research, decide, and accept responsibility for your own choices. 🔳 Create a watchlist and an investment journal. Pre-identify promising stocks for monitoring and document your rationale and criteria. This helps ensure you act according to your prepared strategy—not emotion—during market crashes. 🔳 Review corporate earnings reports yourself. Accurate investment decisions require direct access to reliable information such as financial statements. Using AI to summarize earnings and extract key data is an effective method. ListItemIcon Use AI for information organization. Delegate simple earnings summaries and data extraction to AI, and use your time for human judgment tasks like analyzing industry trends and future forecasts. ListItemIcon Whether you can buy during a crash determines whether you’ll expand your wealth. Building ¥100 million requires not just profiting in normal markets, but also having the discipline and readiness to purchase high-quality stocks at discounted prices during crashes. ListItemIcon Experienced the 2008 Lehman Shock: During the 2008 crash, the Nikkei 225 plunged to around 7,000 points; I was on the verge of exiting the market due to severe losses—but by holding on, I captured the subsequent rebound. ListItemIcon Previously endured a ~55% decline: The Lehman Shock caused a ~55% drop; since then, multiple sharp declines have occurred—including the 2011 Great East Japan Earthquake, the 2020 COVID-19 crash, and the 2022 surge in U.S. interest rates. ListItemIcon During crashes, carefully select high-quality stocks. Don’t simply buy any stock that has fallen; instead, focus on previously monitored promising companies whose prices have become undervalued due to the crash. ListItemIcon Beware of overconfidence among beginners: Although beginners act cautiously at first, once profits begin, they often overestimate their methods, rapidly increase investment amounts, and stop learning or gathering information. ListItemIcon Continue learning even after earning profits: Even after gaining experience, keep reviewing your trades and learning from other investors’ perspectives to develop the ability to remain calm and disciplined during market crashes. ListItemIcon Be cautious of value traps: Some stocks appear cheap based on fundamentals or metrics but fail to rise due to lack of investor interest. Don’t invest solely because a stock looks undervalued—also assess supply-and-demand dynamics. ListItemIcon Target sharp declines in large, high-quality stocks: To avoid value traps, consider focusing on large, well-known domestic and international stocks that have experienced significant price drops during market crashes. ListItemIcon Even large-cap stocks can rise dramatically over the long term: Over the past decade, well-known large-cap stocks in sectors such as heavy industry, shipbuilding, and banking have seen price increases of approximately tenfold—demonstrating substantial upside potential even in large-cap equities. ListItemIcon The more the market feels secure, the more you should be alert for a crash:When many investors are on guard against danger, preparations are already underway, making severe crashes less likely; conversely, large declines are most likely to occur when everyone begins to feel secure and thinks, “This time is different.” 🔳 Set approximate decline thresholds during a crash Instead of trying to pinpoint the exact bottom, define representative decline levels—such as 20%, 35%, and 50%—and plan multiple scenarios accordingly. 🔳 Analyze the root cause of the crash first When a sharp decline begins, avoid rushing to buy. Instead, systematically identify the underlying cause—such as a financial crisis, economic recession, war, or policy change—and define the nature of this particular crash. 🔳 Pre-determine investment amount and asset allocation Decide in advance the total amount to deploy during a crash and how to allocate it across specific assets or sectors to minimize emotional trading decisions. 🔳 Identify desired assets for purchase before the crash It’s too late to begin analyzing companies once a sharp drop begins. It’s essential to select target companies and sectors for purchase during normal market conditions. 🔳 Always review after a crash Verify whether purchased assets subsequently rose or continued to fall. If your judgment was incorrect, analyze why and incorporate those lessons into future strategies. 🔳 Consider strategic averaging-up after contrarian buys After making an initial contrarian purchase at the start of a crash, consider adding more positions only after confirming a market reversal—making this a viable tactical option depending on conditions. 🔳 Sharp declines during crashes are brief A rapid drop can occur within just three days; waiting until a crash begins to prepare is often too late. Emphasize that preparation during normal times determines outcomes. 🔳 Anticipate multiple crisis scenarios Consider how markets might decline under various scenarios—natural disasters, wars, etc.—and predefine which assets to buy and what actions to take in each case. ListItemIcon Avoid margin trading due to high risk While margin trading can be used during crashes, using it without sufficient knowledge or strategy risks massive asset loss and potential exit from the market. ListItemIcon Investors who prepare best are best positioned to leverage crashes The key to turning a crash into an opportunity for asset growth is not reacting when it happens, but preparing in advance—defining watchlists, investment amounts, asset allocations, and trading procedures ahead of time.