日本語

We request that the Financial Services Agency conduct a full-scale nationwide survey of individual investors' profits and losses

• It is often said that 90% of individual investors lose money in stocks, but the government has never conducted a full-scale, large-scale profit and loss survey. Basically, an investment is a zero-sum where if someone gains, someone loses (the sum of the gains and losses is zero).

  The fact that 90% of Japanese individual investors lose money means that there are those who make a profit from the 90% of losses. In fact, many of the profits are held by professional groups called foreign investors (institutional investors).

  The fact that 90% of individual investors lose money proves that the stock market is not a fair and equitable trading market.

  The fact that the state does not grasp the profit and loss situation of individual investors and does not disclose and publicize the profit and loss situation to the people itself is the state's inaction. Is there an inside story that the country does not want to reveal (hide) who is gaining and who is losing?

  We request the FSA to conduct an annual survey on individual investors' profit and loss and disclose the results of the survey.

1．"80% of professionals(group)" vs "20% of amateurs (individuals)"

The share of trading value on the Tokyo Stock Exchange is 80% for corporations, 20% for individuals, and more than 70% of corporations are overseas investors (institutional investors).Algorithmic trading accounts for about 50% of the trading value, and instantaneous crash and spike due to high speed and high frequency trading, unfavorable conditions for ordinary individuals, and stock price manipulation occur. There are two types of investors: those who can take advantage of the system environment, equipment, overwhelming financial power, and systems (institutional investors), and those who cannot take advantage of these systems (individual investors).

Many individual investors are not even informed of their overwhelming disadvantage, nor do they know the actual profits and losses of the market participants, resulting in many cases of huge losses in stock trading.

Injustice and Unfairness

──For example, in terms of the difference in the system environment, HFT(High Frequency Trading) using large-scale equipment are executed in a time to blink, and the speed of recognizing and trading the market is different from that of ordinary individual investors. As a result, the price and order book (order status of stocks) viewed by individual investors are different from the actual situation, and it is not possible to know correctly, resulting in a gap of "be late."──

──For example, "algorithmic trading" using large scale instruments is different from so-called predictive AI algorithms.This is an equipment transaction in which the maximum profit is calculated instantaneously from the supply and demand information (number of buy/ sell positions/order status), and the profit is surely earned with high frequency, high speed, large quantity, simultaneously buying and selling orders that are impossible for human beings.Algorithms are programmed to make profits, in other words, they are programmed to take profits away from other players.The reason why institutional investors use large-scale equipment (algorithmic trading) is because it is a device that makes a surefire profit. and the fact that the device is a surefire profit-making device means that players who cannot use the device are definitely losing profits.Using or profiting from the use of large scale devices (algorithmic trading) may not in itself be "injustice". However, only some players (institutional investors) can use this device. This is undeniably "unfairness".──

Is it not incumbent on regulators to inform market participants that it is clear that players (individuals) who cannot use large-scale equipment will suffer losses, at least in short-term trading? The stock market should officially announce that fairness is not guaranteed and call attention to it.

Price information and terms of transactions are not "fair" because the order book viewed by individual investors may not actually exist and the speed at which orders are placed differs. It is necessary for all market participants to fully understand the current situation in which individual investors are placed in a disadvantageous position due to the unfairness of the market and the actual profit and loss situation of individual investors that results from this situation.

A group of professionals and an individual amateur, who use different weapons, are trading on the same field. It is not a fair market unless there are equal rules, such as trading on a different playing field between professional groups and individual amateurs, or using the same weapons.

 

2．No police to protect the stock market ... lawless zone?

The Securities and Exchange Surveillance Commission (SESC) is the contact point for reporting fraudulent or illegal activities in stock trading, and is said to play a role similar to the police in the securities market.Whose benefit is it that the keepers of the stock market order are made up of people from major securities companies ...

Unfortunately, the SESC has been pointed out to be dysfunctional.

Currently, it does not function as the original "reporting counter desk", but only as a "information providing counter desk".The SESC does not respond in any way to the whistleblower or the public, including whether or not to "respond" to a report from the public. The SESC only accepts the provision of information, and it is left to the administrative discretion of the SESC whether or not to respond to an illegal act.We, the people, cannot even know whether the reported case was investigated or not.

In other words, there is no proper police function in the stock market, and in order to protect the security of securities trading for the people, it is necessary to create and renew an institution such as the Financial Security Police Bureau or to change the current function of SESC.

The organization should be responsible for informing the public in an appropriate manner how many reports it has received from the public and how it has responded to them during the month and year, setting a target number of responses to the number of reports received, and achieving the KPI.

 

～Finally～

Thank you very much for reading so far.

If 90% of individual investors lose money in the stock market, there is someone who profits from that 90% loss.In fact, the fact that individual investors living in Japan are competing with each other for profits is a minor aspect, and in reality, most of the profits are gain by　institutional investors based overseas.

In other words, the assets of individuals living in Japan are flowing to institutional investors (overseas).This means that the savings, assets and consumption of the people living in Japan will decrease, and eventually the GDP and tax revenue of Japan will decrease.(*Financial taxation of foreign institutional investors, brokerage transaction fees, exchange market entry fees, etc., appear at first glance to increase immediate tax revenues and securities company profits, and thus contribute to GDP growth, but they are only partial revenues and tax revenues from the transfer of Japanese citizens' financial assets {assets/income}, therefore overall GDP and tax revenues will decrease.)

The "Individual Investor Profit and Loss Survey" exposes these to the public.

If the results of the survey of individual investors' profits and losses are made public, the fairness and impartiality of the stock market will be called into question, and as a result, there is a high possibility that the dark side of this country will be brought to light: the structure of interests between the state and the securities industry, the collusion between the public and private sectors, vested interests, and the lack of legal restrictions on foreign institutional investors due to the balance of power between the states.

The reason I am asking for this survey is to protect Japan's savings, assets, and consumption, and to enrich Japan.In Japan, investments in risky assets such as securities, investment trusts and stocks account for an average of only 15% of family finances (less than 1/3 of the 55% in the United States).

If a sound and fair securities market were to be formed, many Japanese people will be able to participate in investment with peace of mind.If 90% of individual investors are losing money, it is proof that the stock market is not a fair and equitable trading market.

Why don't we work together to create a fair and equitable stock market in which everyone can participate? From unfairness and inequity of results to fairness and equity of results.

Your support will change society.

Thank you

• ※Institutional investors are a group of investment professionals consisting of securities companies, insurance companies, pension organizations, sovereign wealth funds, and hedge funds. There are major differences between individual investors and institutional investors in the actual system environments, equipment, financial resources, and institutions they use. Institutional investors use large-scale, sophisticated equipment that is impossible for individual investors to have, and employ techniques such as algorithmic trading and high-speed, high-frequency trading (HFT trading: an investment that repeats trading at high speed in a very short period of time, from milliseconds to seconds.) In addition to the unfairness of being able to place a large number of orders at a speed that is impossible for a person, the institution also puts individual investors at a disadvantage.For example, an individual investor can short only a certain stock, whereas an institutional investor can short all stocks, and it is possible to sell a large number of stocks at once and rapidly lower the price. In addition, illegal activities called "spoofing"【layering ;placing a large amount of orders and cancelling before they are executed (with the intent of manipulating the market)】,"information manipulation," and "market manipulation" are carried out on a daily basis.