Through the Storm to Implementing 'Buy & Homework': How a Beginner Investor Rebuilds Their Portfolio with US Growth Stocks
Photo: 'Kong-guksu' I had for dinner during my recent business trip to Korea. I wasn't feeling well and wanted something gentle on my stomach, so I looked it up and found this. It's a cold Korean noodle dish made with a soy-based soup, which you don't see much in Japan. It was a gentle flavor and exactly what I needed!
■ 1. Surviving a 1.5-month storm with a 'wait-and-see' specification
In my previous article, I wrote about the process of redefining my own rules (survival specifications) when faced with the error of 'unrealized losses' for the first time since I started investing.
About 1.5 months have passed since then. There was noise that shook the market, such as the escalating tensions in Iran, but the VIX index (fear index), which is my monitoring indicator, never exceeded the 'out-of-tolerance' level of 50 and it did not lead to a fatal crash.
During this period, I basically chose the specification of 'wait-and-see'.
In resin molding, if you rush to change conditions when the mold temperature is unstable, you end up mass-producing defective products.
The market is the same; I believed the golden rule is not to move rashly in the middle of a storm, but to wait for the heat to cool down.
As for specific actions, I only sold some Japanese stocks that I had been late to exit and were in the red once they turned a profit, bought a little silver, and made spot purchases of a few US stocks.
As a beginner investor, it was a 1.5-month period of debugging by 'waiting' until the system stabilized.
■ 2. Hacking during system instability: Returning to primary sources
Entering mid-April, I felt the market's reaction to geopolitical risks gradually dulling, and a sense that things were returning to 'steady-state operation.' I was discussing with my family's greatest strategist (my wife) whether it was time to take new positions.
Actually, I wasn't just staring at the charts. During these 1.5 months of holding no positions, I read every book on investing I could get my hands on.
As an engineer, when a system is unstable, it feels most natural to read the manual (primary source) and conceive the next architecture.
And, the input I gained during this period brought a major 'specification change' to my portfolio design.
■ 3. Aggressive investment design: Introducing 'Buy & Homework'
I was particularly influenced by 'Jim Cramer's Real Money'.
The book cover looked a bit sketchy and the small print made it hard to read, but I dove into it, partly because it was recommended by activist Shintaro Tabata, whose YouTube videos I watch as a primary source.
The biggest lesson I learned from this is,
that I should implement 'Buy & Homework' instead of 'Buy & Hold'
is the point.
It's not just about buying a stock and being done with it; it's about constantly 'checking the drawings' of that company's performance and trends. If you can't do that, the strict specification requirement is to give up on managing individual stocks and quietly buy investment trusts (standard products) instead.
What is even more interesting is that it recommends taking risks, stating that 'you should also speculate'.
To earn returns, one must accept risk (the range of tolerance), and the means to minimize that risk is daily 'Homework'.
For example, Kioxia had a deficit of 243.7 billion yen for the fiscal year ending March 2024 before its listing, but a surplus of 272.3 billion yen for the fiscal year ending March 2025. The public offering price at the time of listing was 1,455 yen, and now... I believe those who were able to buy in at a low price at that time took the risk and are where they are today.
After reading this book, I made a decision.
I have started investing in earnest in 'strategic growth stocks,' not just defensive stocks like Coca-Cola and Verizon that I had been dealing with until now.
I am taking risks and, while carrying out daily design reviews, I am going to peer into the abyss of US stocks.
As for why US stocks, as introduced in the article below, I want to reduce the ratio of Japanese assets (yen-denominated) to diversify, and because US stocks do not have the concept of daily price limits, so when they go up, they go up significantly, and I think the destructive power of growth stocks is different.
Of course, I will not touch my emergency fund.
■ 4. Passing the Asset Building System to the Next Generation
The second book is the great bestseller 'Rich Dad Poor Dad'.
What this book teaches is the extremely logical philosophy of not spending income on consumption, but first allocating it to 'assets' and building a 'circuit (route) that generates income from assets'.
The most beautiful blueprint for the fundamental question of why one should invest was there. I recommend it as the first book to read when starting to invest.
It would be a waste to keep this powerful logic to myself. Thinking so, I explained it to my eldest and second daughters as simply as possible.
At just the right time, the opening of Rakuten Bank and Rakuten Securities accounts for the three sisters was completed. The infrastructure for the 'Children's NISA' starting next year is complete.
My eldest daughter is in the 5th grade this year. From now on, I intend to think about how to run the system of asset management as 'money study,' not just saving money, with the whole family as the strongest team, and test (Do) it in the smallest units.
■ 5. Current Asset Portfolio (As-Is) and Future (To-Be)
Following input from reading and the update of the design philosophy based on it, my portfolio is changing its appearance significantly.
The asset ratio in stock investment as of 5/13 (As-Is) is as follows.
I hold almost no domestic stocks other than the NISA growth investment quota.
・Japanese stocks: 52.62%
・US stocks: 24.77%
・Deposits, etc.: 14.14%
・Investment trusts: 8.18%
Breaking away from the dangerous design of a one-legged approach lacking redundancy, where '90% of all assets are in Japan' as I wrote in a previous article, the ratio of foreign currency (US stocks) has grown to about 25%.
From now on, I will incorporate not only defensive measures but also an 'offensive' strategy of speculating in US growth stocks. Of course, without neglecting my daily homework (verification).
I have weathered the storm and acquired new weapons (logic) through reading. Having finished my debugging period as an investment novice, I believe this is where the operation of my asset-building system truly begins.
