[Investor Story] The reason for choosing only 'US stocks' with 40 years of investment experience. Did the investment grow 18 times over 20 years?!
In this feature, we interview individual investors and renowned investment experts utilizing moomoo Securities for their investments. Through real-life investment styles, philosophies, and episodes of success and failure, we offer insights into asset management.
This time, we spoke with a US stock enlightenment advocate who has been deeply engaged with US equities for 40 years...@川田のアメリカ株式We had the opportunity to interview him!
His journey into the world of US stocks began in 1986 when he was transferred to Daiwa Securities’ NY branch. Using long-term investment strategies centered on index funds...He grew his financial assets 18-fold over 20 years.His investment philosophy is best described as 'winning without moving.' He cautions against frequent trading and emphasizes understanding the structure and culture of the US market. Mr. Kawada’s investment approach serves as an unwavering compass for many individual investors.
1. Profile
During his time at Daiwa Securities, he worked in foreign stock sales in New York, Hong Kong, and Singapore. Later, after working at PaineWebber (now UBS) Securities, he founded ExeTrust Co., Ltd.He edits the Japanese Sunday edition of the leading US investment weekly 'Barron’s,' called 'Barron's Digest'...In addition to editing, he provides consulting related to the US, US stocks, and asset management. For Japanese investors, he advocates for international diversification and equity investment...While continuously advocating for index investing in US stocks, I have been promoting the appeal of US stock investments. Graduated from Kobe University's School of Business Administration.MBA from the University of Rochester in the US.
2. How did you first encounter US stocks?
The reason I encountered US stocks was due to my assignment as a resident employee at Daiwa Securities' NY branch in 1986. The department I was assigned to happened to be the sales and trading division for US stocks. Since then,I have been involved with US stocks for about 40 years.。
3. What was the first US stock you bought?
At the time in 1986, since I was in charge of the trading desk, I did not personally buy or sell stocks. I believe I first purchased stocks on my own around 1996, when I was stationed in places like Hong Kong and Singapore.
$Microsoft (MSFT.US)$and$Cisco (CSCO.US)$ among others,I remember owning several stocks that were popular during the IT bubble at the time.Back then, these stocks garnered so much attention that they were often described as 'the only game in town,' making them extremely popular. Later, when I was in charge of US stocks at the Tokyo headquarters’ Foreign Stocks Department, I vividly recall how our team actively promoted these stocks internally. However, ultimately, the burst of the IT bubble in 2000 hit us hard.
4. How did you gather information?
During my time at Daiwa Securities’ NY branch in 1986, it was routine to read publications like The Wall Street Journal and research reports prepared by Daiwa Securities. Unlike individual investors, there wasn’t any specific book I relied on.The work itself involves gathering information.
5. What made you start using moomoo Securities?
Like moomoo Securities,I want to support emerging financial startupsbecause I feel that way. Additionally, with moomoo Securities'financial metrics and company overviews visually organized,it’s very helpful as it reduces the time spent on stock research.The bulletin board feature that allows investors to freely exchange opinionsis also extremely beneficial.
6. What is your investment style?
I basically focus on long-term investing centered around index funds. Although I also hold a few individual stocks, they make up only a small portion of my total investment assets, and I don't trade them frequently. Some of the stocks I've held for a long time have been kept for several years.
For me, investing is about growing my assets. Therefore, I mainly invest in $NASDAQ 100 Index (.NDX.US)$や$S&P 500 Index (.SPX.US)$ETFs that track indices. I've come to realize that these indices allow me to grow my assets efficiently and with peace of mind over the long term. This is why I choose them.
Furthermore, If you frequently buy and sell individual stocks, about 20% of your profits will be taxed. Without this tax burden, my investment portfolio would grow even larger. Therefore, I believe it's more rational to hold onto investments for as long as possible before selling.
What kind of analysis methods are you using?
Since I focus on index investing, I don't do much detailed analysis of individual stocks. However,、Determining whether American capitalism will continue to function in the future.I believe it is very important.
For example, when Mr. Trump reappeared on the political stage, there were voices questioning the state of American capitalism and democracy. If a situation were to arise where the American system truly collapses, there would be no point in continuing to hold American stocks. While keeping an eye on that aspect, I continue to invest, confirming that American capitalism is still healthy.
8. What are the commonly used analysis tools and features of moomoo Securities?
CurrentlyBulletin boardI am disseminating information. Recently, as part of my analysis, I have started to pay more attention to options trading. Although I have not actually engaged in options trading yet, I have always been interested in it.Researching the future movements of individual stocks while looking at the "Options" tab.I am doing.By looking at the trading status of options and the put-call ratio, you can determine whether investors are optimistic or pessimistic about the future of that stock.For example, a large number of puts (rights to sell) can be considered a sign that investors are wary of downside risk.
Furthermore, Overview tab under 'Analysis' for individual stocksis also extremely easy to understand, allowing detailed insight into the company’s historical stock splits and consolidations, its standing within each sector, and information about management. Moreover,Financial Indicatorscan go back as far as 20 years of data, which is very helpful for financial analysis.
Of course, I also use other media sources and regularly check news outlets like Bloomberg and Reuters. Given my job, I'm constantly exposed to various kinds of information throughout the day, so your platform's features are highly valuable as part of that mix.
(1) Individual Stock 'Option Information'
(2) Individual Stock 'Overview'
(3) Individual stock 'Financial Indicators'
9. Specific investment episodes
In March 2000, at the peak of the so-called IT bubble, I owned $Microsoft (MSFT.US)$や $Cisco (CSCO.US)$ , along with many other IT stocks that were popular at the time. However, after the bubble burst, stock prices plummeted. Eventually, I had to sell all of them at a significant loss.It was an incredibly painful and bitter experience, leaving me feeling utterly devastated.
$Cisco (CSCO.US)$There were stocks like $Microsoft (MSFT.US)$and$Amazon (AMZN.US)$ that never recovered afterward, but others achieved astonishing growth. Looking back now, if I had continued holding them, my assets would have grown significantly. But at that time, it was impossible to foresee what would happen, making decisions extremely challenging.
From such experiences, I learned thatThe importance of not giving up midway and continuing to holdBy investing in diversified indices or solid stocks and holding them long-term, no matter how tough the situation, time will be on your side—assets are likely to recover and eventually grow over time.
After going through this bitter experience, I nowhave settled into a stable investment style centered around index investing,growing my investments 18-fold over 20 years.albeit with difficulty.
【Performance comparison between Cisco Systems and NASDAQ 100】
10. What sectors interest you?
As expected, $NASDAQ 100 Index (.NDX.US)$や$S&P 500 Index (.SPX.US)$large IT stocks like those included inI believe they are promising. Ultimately, I think the power of such strong companies will significantly change the economy and society. Specifically,$Microsoft (MSFT.US)$や$NVIDIA (NVDA.US)$ examples like Apple and NVIDIA could be considered representative.
However, there is no such thing as an 'eternal youth'—in other words, no individual stock will rise forever. Nevertheless, the market as a whole has the potential to continue growing over the long term. This means that a 'market that keeps rising forever' is indeed possible.
Of course, the components of the market, that is,the constituent stocks will change over time.Considering this,it seems reasonable to invest in the Nasdaq 100, whose composition changes with the times.That’s how I feel.
11. Stocks of interest?
First and foremost, in a market environment polarized between the Magnificent 7 and other stocks, it is important to focus on the bigger picture—namely, the overall market or sectors. Then, it would be ideal to follow a process where you conduct thorough research and choose individual stocks that you can personally be confident in.
However, one must be cautious. Concentrating investments solely in individual stocks could lead to significant mental stress. For example, if you invest in five stocks and one or two of them underperform, the overall performance might not meet your expectations. This can lead to feelings of regret, such as thinking, "Why did I choose this stock?" or impulsively selling everything and trying to time the market to buy back later. Such actions often result in asset management failures.
To maintain emotional stability while continuing to invest, it’s crucial to hold a diversified portfolio of quality stocks. For instance, $NVIDIA (NVDA.US)$ Apple has seen an upward trend recently, but there was a period when it stagnated. The same goes for $Apple (AAPL.US)$ . It's been negative year-to-date, and if Apple is down while other indices are performing well, you may start questioning why you invested in Apple.
And then, if you decide to sell Apple and switch to NVIDIA, which is currently rising, NVIDIA might just start to decline. It’s strange how that happens, but through these repeated experiences, I’ve learned myself.
That’s why, “during times like these, it’s important not to act rashly.” Staying in the market—in other words, “remaining in the market”—is very important for long-term asset management.In this sense,index investing is a very effective option, and that’s what I believe.
[Mr. Kawada's held stocks (partial) as of July 10]
$Invesco QQQ Trust (QQQ.US)$ : A representative exchange-traded fund (ETF) that tracks the Nasdaq 100 Index. The Nasdaq 100 consists of the stocks of 100 large non-financial companies traded on the Nasdaq market. It is characterized by a high concentration of technology-related stocks and includes many growth-oriented firms.
$Intuitive Surgical (ISRG.US)$ : An American company that develops, manufactures, and sells the robotic-assisted surgery system 'da Vinci'.
12. How do you utilize the moomoo Securities message board?
Since I share information daily, you can see it if you check the message board. For example, today (July 10), I posted two entries.「Memory and Record」This post touches on the Nasdaq Composite Index reaching new highs. Observing these index movements, I consider whether those who panicked and sold in March or April were able to buy back successfully afterward. Some acquaintances proudly claim they sold off well, but many are regretting not being able to act following the sharp rebound, just watching with folded arms. I continuously share such insights.
Furthermore, Macroeconomic topicsare common, butIndividual stocksI will also introduce good examples if there are any. For instance,ideas for selling or rolling optionswhich I have posted before. On weekends and Mondays, I share a list of stocks featured inthe 'Barron’s Digest', which I edit,and touch on notable funds within it. For those interested in more details, I recommend reading the 'Barron’s Digest'.
These posts receive a lot of clicks, with some garnering over 20,000 views. It seems many people are checking them out.
13. What message would you like to convey to your readers?
If the goal of investing is wealth building, it’s important to balance index investing with individual stock investing.However, frequent trading can hurt performance, so be cautious.
If you want to enjoy stock investing as a form of entertainment, thrill, or for small returns, I think it's fine to take on the challenge with individual stocks. However, that approach is not my strong suit. My goal is simply to increase my assets, and for those who want to know my method,please refer to my forum posts or works such as 'The Loser's Game' by Charles Ellis.Although the theory has already been written about, putting it into practice can be quite difficult.
In reality, when people actually try it, many end up panicking during sudden market shifts, selling out of fear, or losing money because they couldn't buy back after panic-selling. For example, when the market dropped in March-April this year under the Trump administration, many people hastily sold their holdings and missed out on profits when the market recovered afterward. There are many cases where doing nothing would have resulted in significant gains.
Moreover, when building wealth through US stocks, factors such as history, culture, and religion play an extremely important role. In other words,Mathere is always a deep background behind every market.I hope you understand that point as well.
If you have any questions for Mr. Kawada or would like to learn more about investment strategies, please feel free to leave your comments! We look forward to your questions.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.Read more
Comments (5)
to post a comment
105
35