[Mental Performance] Mental Performance Theory for Investors - Let's Talk About Investing Without Breaking Your Heart

Even if long-term investing is correct, there are times when it is boring.

My investment style is basically long-term and diversified investing.
I believe that staying in the market for a long time is the most reproducible strategy.

However, to be honest, that alone is a bit boring.
That's why I also do day trading just for fun.
It is strictly an 'entertainment category'.

It is not a place to go to win seriously.
It's like a little playground to measure the distance from the market.

There are stocks that make you tired for some reason, even though they have the same price movement.

There is something strange.

Even though it's the same time, the same amount, and similar price movements,
there are stocks that make you excessively tired,
and stocks that you can stay calm with for some reason.

Stocks you are used to, stocks you are not used to.
Stocks where the share price moves within a box range, and stocks that don't.

At first, I thought it was a difference in experience.
But there is a feeling that cannot be explained by that alone.

The perspective of how much the brain is consumed

That's when I realized.

This is not a question of winning or losing.
It is a question of 'how much the brain is consumed'.

I consider this to be an indicator of mental performance in investing,
or to put it more simply,
'how stable your heart can remain while touching that stock'.

What is mental performance in investing?

Mental performance here is not about mental strength or patience.

It is about how natural your thoughts and emotions can remain while looking at that stock.

You end up opening the chart unnecessarily many times.
You worry about unrealized losses for no reason.
You want to break the rules you set for yourself.

Such a state is a sign that your mental processing capacity has already been depleted.

Company names affect investor psychology more than you think

It may come as a surprise, but company names significantly influence an investor's mental state.

Company names that are common in drug discovery ventures and impossible to remember.
Names with so many katakana characters that even pronouncing them is questionable.
Stocks with letters at the end of their ticker codes.

Just looking at these stocks makes the brain tired.

Every company has a valid reason for choosing its name.
However, an investor's brain is honest, and
if the name doesn't stick in your head, you naturally start to distance yourself from it.

The quiet sense of discomfort brought by company name changes

There have been many company name changes recently.

Some are accepted without any discomfort, while others make your thoughts stop for a moment.

Changes that add regional names or shift toward English notation are relatively easy to understand.

On the other hand, changes that jump to completely different concepts
leave a small amount of noise in the investor's mind.

This is not about whether it is good or bad.
It is just that changes the investor's brain cannot keep up with will definitely lower mental performance.

Common traits of stocks that easily drain your mental energy

Stocks that tend to lower mental performance have common traits.

The reason for the news is unclear. You don't know who is buying or who is selling. Even when people say 'foreign institutional investors,' you end up wondering who that actually is.

Especially troublesome are stocks with extremely low trading volume.

Why are 'stagnant stocks' also tiring?

Low price volatility does not necessarily mean safety.

A state where you don't know why the price is what it is right now slowly wears out the human brain.

Stocks that constantly require interpretation are more mentally taxing than you might think.

Characteristics of stocks that keep your mind stable

On the other hand, there are also stocks that make it easy to keep your mind stable.

The business model is easy to understand.
IR information is organized with just the right amount of detail.
There is nothing extremely strange about the order book.

It's more about a sense of conviction than the price itself.
This feeling is quite difficult for AI to handle.

Humans can no longer win in terms of information processing speed.

The current market is, above all, fast.

Algorithmic trading, AI, breaking news.
By the time I hear breaking news on TV, someone else already knows that information.

In an era where quantum computers and semiconductor performance are discussed, it is unreasonable for individual investors to try to win on speed.

Where individual investors should compete in the AI era

That is precisely why individual investors should not compete on the speed of information processing.

It is about how soundly you can keep your mental state.
It is about how well you can maintain an appropriate distance from the market.

The more you try to win, the easier it is for your mind to break.

I write this as a reminder to myself as well.

The more you try to win, the more your mental performance drops.
The moment you think you cannot lose or want to win it back, your judgment becomes distorted.

The reason I define day trading as an 'entertainment category'

That is why I define day trading as an entertainment category.

Don't take it too seriously.
Follow the rules.
Step away when you stop enjoying it.

Mental strength is not something to be trained.
It is something to be designed so that it does not break.

Survival strategies for individual investors in the AI era

What is most easily lost in investing is not capital.
It is your judgment.

That is why I quietly step away from stocks that are mentally exhausting.

Thoughts as an investor with ADHD tendencies

By the way, I am also an investor with an ADHD temperament.

There are times when I focus too much, and times when I get exhausted all at once.

That is precisely why I prioritize understanding the quirks of my own brain and avoiding environments that easily drain me.

To stay in the market for a long time

To stay in the market for a long time.
Prioritize not breaking down over winning.

I believe that, too, is a respectable investment strategy.

*This article is based on personal experience and observations; please make investment decisions at your own risk.