Back to the Future: September 2006

黃鶯不啼我就等牠啼

織田信長 vs. 德川家康

織田信長是戰國時代一位冷酷無情的武士，他正待統一日本全國，取代天皇成為日本的「神」之際，卻不幸被他背叛的部下明智光秀困於本能寺而死於非命。

德川家康開闢日本江戶幕府二百多年的和平繁榮時代。家康是個老謀深算的陰謀人物，他先向豐臣秀吉稱臣，保住了自己在關東地區的江山，到豐臣秀吉死後，才對豐臣家發動戰爭，統一了日本全國。他的「黃鶯不啼我就等牠啼」的哲學，至今仍然受到日本政治家推崇。

安倍晉三的個性明顯的與小泉不同，他懂得內斂，可以與朋友一起喝酒鬧成一片，但是小泉卻不是這種個性，小泉永遠是孤獨的一匹狼，連提拔他的派閥會長森喜朗都說，小泉是個「怪」人，註定孤獨。

26日成立的安倍政權，不僅在國內深受注目，連與小泉交惡的中國、南韓也都相當注意日本未來的動向。

政論家們說，安倍面對的最大外交課題中，亟待解決的是必須立即改善因小泉參拜靖國神社而惡化的日中及日韓關係。

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关于德川家康的著名"杜鹃不啼"故事

"杜鹃不啼"故事是通过日本战国时代三位传奇英雄对杜鹃不啼一事的不同态度來解释他们的个性差异，但是主要是为了衬托表现德川家康的不凡忍耐性格。一隻杜鹃不唱歌，丰臣秀吉说：“如果杜鹃不唱歌，我会想办法让牠唱”；织田信长说：“如果杜鹃不唱歌，我就杀了牠。”德川家康却说：“如果杜鹃不唱歌，我会等着牠唱”；德川家康正是靠着这個忍字訣得以出人头地。

Wall Street People

博學之，審問之，慎思之，明辨之，篤行之。 (學問、思辨、行動)

Wall Street People Vol. II, Charles D Ellis with James R. Vertin

“It is always just over the horizon, no matter how we move toward it. The most computer-skilled experts have come to the most cataclysmic of ends.”

“Markets represent not only economic and business fundamentals but also complex human emotions.”

“Our investments will attempt to reduce the risk of permanent capital loss (not short-term quotation loss) to a minimum.”

“Livermore found that while he was right more often than not in anticipating where a stock was heading, he was not making as much money as should have because he was following the age-old psychology of the conventional trader-snatching at immediate gains instead of letting his profits ride. He took a 5-point profit only to see his stock continue up 15 or 20 points. He came to realize that the hardest thing for a trader was to put his anxieties on a leash. The market did not outwit the trader. He outwitted himself. The man who could sit still for as long as necessary for the market to confirm the accuracy of his judgment was a rare breed. The most important thing was to establish position, to keep one’s eye on the long swing.”

“From then on Livermore’s career as a short seller gained momentum. He became a master manipulator of the subterranean depths of fear, exploring the psychic caverns of suppressed anxieties with a touch approaching that of genius. He turned into an expert at sensing the nature and scope of mass hysteria, the threshold levels at which different men begin to panic. Everyone has some level beyond which he loses control of himself. And Livermore became adept at manipulating the conditions necessary to bring his bull opponents to this point. Wrestling with one’s adversary was frequently a long, sustained cold war of nerves. Livermore developed an infinite patience for waiting out the enemy, an infinite cunning for accepting reverses and turning them into opportunities, and the courage to wait without moving a hair until the time was ripe for a decisive strike.”

“Utilizing these talents, Livermore was able to make a second killing within a year after the San Francisco earthquake. In 1907 he had studied economic conditions carefully and come to the conclusion that the money outlook was far more critical than most people realized. Money rates were rising ominously all over the world. Unemployment was growing in the United States. Livermore concluded that the nation was heading for a recession and that the stock market was bound to react accordingly.”
“During his lifetime, Livermore gained and lost several multi-million dollar fortunes. Most notably, he was worth $3 million and $100 million after the 1907 and 1929 market crashes, respectively. He would lose both fortunes, but not recover the losses of the fortune he had in 1929. Apart from his success as a securities speculator, Livermore left traders a working philosophy for trading securities that emphasizes increasing the size of one's position as it goes in the right direction and cutting losses quickly.
Ironically, Livermore sometimes did not follow his rules strictly. This lack of adherence was the main reason for his losses after making his 1907 and 1929 fortunes.”
“He continued to make money in the bull markets of the Roaring 20's. In 1929, he noticed market conditions similar to that of the 1907 market. He began shorting various stocks and adding to his positions and they kept declining in price. When just about everyone in the markets lost money in the Wall Street crash of 1929, Livermore was worth $100 million after his short-selling profits.”
“Through unknown mechanisms, he yet again lost much of his trading capital, accumulated through 1929. Thus, in 1934, he declared bankruptcy for a second time.
Although untouchable trusts and cash assets at his death totalled over $5 million, he had failed to regain his trading confidence by his death. A lifelong history of clinical depression had finally become dominant in his final years.
In 1935, Dorothy shot their son, Jesse Livermore Jr., in a heated drunken argument. The son survived, but the episode caused a scandal. He would divorce Dorothy and marry another woman whose previous three husbands had all committed suicide. This would prove to be a grim harbinger.
In 1940, his book on trading strategies, building on the founding fame of 'Reminiscences of a Stock Operator' was published. In the Sherry-Netherland Hotel on November 28, 1940, he committed suicide. His clinical depression was cited as a factor. Today Livermore is regarded by many professional traders to be the greatest trader in history.”
“I believe the true road to preeminent success in any line is to make yourself master in that line. I have no faith in the policy of scattering one’s resources, and in my experience I have rarely if ever met a man who achieved preeminence in money-making --- certainly never one in manufacturing --- who was interested in many concerns. The men who have succeeded are men who have chosen one line and stuck to it. It is surprising how few men appreciate the enormous dividends derivable from investment in their own business. There is scarcely a manufacturer in the world who has not in his works some machinery that should be thrown out and replaced by improved appliances; or who does not for the want of additional machinery or new methods lose more than sufficient to pay the largest dividend obtainable by investment beyond his own domain. And yet most business men whom I have known invest in bank shares and in faraway enterprises, while the true gold mine lies right in their own factories.”
“I have tried always to hold fast to this important fact. It has been with me a cardinal doctrine that I could manage my own capital better than any other person, much better than any board of directors. The losses men encounter during a business life which seriously embarrass them are rarely in their own business, but in enterprises of which the investor is not master. My advice to young men would be not only to concentrate their whole time and attention on the one business in life in which they engage, but to put every dollar of their capital into it. If there be any business that will not bear extension, the true policy is to invest the surplus in first-class securities which will yield a moderate but certain revenue if some other growing business cannot be found. As for myself my decision was taken early. I would concentrate upon the manufacture of iron and steel and be master in that.”
“One day, after a particularly sharp sell-off in Fukushima Boseki shares, Nomura pestered the management into showing him their order-books. What he found was that instead of being on the verge of collapse, the firm was thriving as a result of wartime demand for uniforms, socks and tents. The order-books were bulging, the spinning looms were running at full capacity and profits had never been better.”
“The next day, when Nomura returned to the floor of the Osaka Stock Exchange, he started quietly buying up Fukushima shares. Other traders noticed his buying and questions him, but he casually told them he had earlier sold short, and was now buying back to cover his short positions. He began sold short, and was now buying back to cover his short positions. He began buying shares at twenty yen and within days the price hit twenty-five. He kept on buying until the price reached thirty. Nervously, some of the traders who had sold shares they did not own began to panic and bought up most of the available shares and they were unable to buy back their stock without forcing the price still higher. Quick-witted dealers turned the short sellers’ predicament into a “short squeeze,” a buying panic that fed on itself.”
“Nomura sat back as the price rose each day, hitting thirty-five, then forty, forty-five, fifty. By the end of 1905 the price of Fukushima Boseki had rocketed fourfold to 100 yen and Nomura had earned on paper the 20,000 yen ha had borrowed form his father earlier. He sold a few shares in the market on the way up, but was so thrilled with his first stock market killing that he kept most of his shares as a long-term investment. He refused to part with his holding even later when he became rich and famous. Nomura group companies have adhered to the wish of their founding father, so that in the 1990s, over eight decades after Tokushichi Nomura II purchased his first investment, they retain a 15 percent stake in that same textile company, now known as Shikibo. And, as if to symbolize the Nomura group’s bond with Shikibo, a distant relative of Tokushichi Nomura II reigns as president.”
“Nomura was crudely acting out intuitive market precepts which soon amassed him a considerable fortune. He played the crowds, mastering their psychology and getting the better of them. When emotion overtook reason in the stock market, he was there to buy from the distressed and sell to the eager, exploiting the mass mentality that led people to make impulsive and often irrational decisions.”
“Nomura decided that the best way to invest and beat the crowd was to hire someone to poke around individual companies, talk to management, check order-books and, if possible, calculate stock-price movements related to cycles in the Japanese and world economics. He hired an investigative journalist named Kisaku Hashimoto to run Nomura Tokushichi Shoten’s newly formed research department. Hashimoto was a star reporter for the Osaka-Mainichi Shimbun who had many contacts who could pass him inside information on corporate Japan.”
“The great 1906 bull market-one of the greatest in the history of Japan-spread like wildfire. Stocks would suddenly burst into life, setting new highs and doubling or tripling in a matter of weeks. A buying panic would ensue on the Osaka Stock Exchange floor, as dealers pushed and shoved one another to buy the latest fast-moving stock, only to find that interest had subsided, having leapt to yet another stock.”
“Nomura had been buying stock since 1905 and was sitting on vast profits in both his long-term portfolio and his stock-futures portfolio. --- In December 1906 his brother Jitsusaburo, always inclined to caution, advised Nomura to sell his shares. After all, why allow excessive greed to risk the million yen he had made? Nomura saw the wisdom of his brother’s advice, but his thirst for market excitement, his need always to be at risk in the stock market, exerted a stronger pull. Not content with banking his profits, he calculated he would make twice as much by betting the market would fall.”
“Nomura had no doubt that the 1906 bubble would burst. He and Hashimoto did some research and found close similarities with the conditions before the stock market plunge following the Sino-Japanese War. They began to examine the daily data on the market closely as Nomura’s scouts tracked the selling and buying patterns of major Osaka dealers. Then, on 10 December, they detected a subtle change, noting that a few big dealers had begun selling. That day Nomura took action and began selling out his long-term portfolio, eliminating one third of his holdings by the end of the week. At the same time, he started selling share futures short, betting that the market would fall and he would be able to buy back at a cheaper price. Prices continued to rise, however, as the big Tokyo dealers unexpectedly began buying Osaka shares. Jitsusaburo urged him not to take additional risks by selling short. “Only sell your long-term holdings,” he told Nomura, but his elder brother was unmoved. His mind was set – he wanted to add another bag of gold to the swelling family coffers.”
“Nomura’s selling had little impact on the market. Prices rose daily and Jitsusaburo pleaded desperately with Tokushichi to cover his short positions. Then, on 26 December, five medium-sized stock dealers paid a visit to Nomura’s offices to ask him to persuade his childhood friend Einosuke Iwamoto, now one of Kitahama’s most successful stock dealers, to start selling in the hope of triggering a big sell-off. They needed help, but Nomura refused his fellow dealers on the grounds that he would be taking advantage of his special relationship with his friend. The dealers left Nomura and decided to solicit Iwamoto’s support themselves. Surprisingly, he agreed to help them and the next day led the selling charge on the floor of the Osaka Stock Exchange. But their efforts were useless. The buying spree continued.”
“Each day Tokushichi, who had sold out his entire long-term holdings to finance his futures positions, waited for the market to show signs of weakness and each day the market moved against him. He was now losing considerable sums money. The bull market of 1906 carried on into 1907. Tokushichi, distressed with the abnormal rise of the market, went so far as to place a large advertisement in a local Osaka newspaper warning investors of danger ahead.”
“Although the market was still moving against him, Nomura stepped up the pace of his short selling. Inevitably, margin calls from the market traders who dealt for him began to arrive. Japanese investors at that time needed little cash to make vast speculations on the market. If they made money, everything was fine and the profits were added to their trading accounts. But if the market did not go their way, they needed to remit funds on a daily basis.”
“The money Nomura had placed on consignment was rapidly being whittled down, so that by early January the fretful brokers began to press him even more brusquely. --- But day after day it continued to rise.”
“By late January 1907 Tokushichi was desperate. He decided to seek the aid of a banker named Washio shibayama who was manager of the Konoike Bank, one of the three leading banks in Osaka at that time. Shibayama faced a delicate situation. A Nomura Shoten bankruptcy could take down the bank, but Nomura Shoten was one of his most important customers. Like his counterparts at other banks, Shibayama had virtually unlimited powers of discretion when leading to customers, playing a supportive role in nurturing Japan’s early industrialization. Little documentation was needed to lend money. Instead, bankers relied on friendship, instinct and judgment-often in that order.”
“--- But the next two days proved nerve racking. The market surged still higher on a renewed wave of buying. In Osaka the index was up fifty-eight points, or nealy 8 percent, on 16 January and jumped another fifty-one points the following day. Another peak, 774 on the index, was scaled two days later. Somehow Tokushichi and the other dealers, including Iwaamoto, kept their nerve. This could not go on forever.”
“Then, on a snowy 19 January, it happened: the market began to crack.”
“Within days, the great bull market of 1906 became the great bear market of 1907, one of the most dramatic declines in the history of the Japanese stock market, comparable to the collapse of the St. Petersburg exchange in 1917 and of the Shanghai stock market in 1949. In the twelve days from the peak of 19 January 1907 to the end of the month, the market shed one third of its value. By the end of 1907 the selling bloodbath had reduced the market’s value by 88 percent. The final reading on the index at the end of the year was a mere 92, down from 774.”