A book that perfectly blends investment theory and practical experience essential for becoming a happy investor.
An investment practice book that encapsulates the authors' 30 years of investment expertise and practical know-how.

Many investors assume that they can predict market patterns through charts, but this idea is at odds with the reality of constantly changing market factors and unexpected events that occur frequently.

First, past data cannot be the only guide to the future.
While historical data can be helpful in making trading decisions, it's important to recognize its limitations.
Many variables, including market conditions, investor sentiment, and environmental factors, all affect stock prices.
Charts showing past data aren't the only things that are relevant to stock prices.
Tools such as moving averages can help show price trends.
However, past stock price movements cannot guarantee future market movements.

Second, the stock market is like a river; you can never step into the same water twice.
Market conditions that change every moment affect investment strategies.
A stock that performed well yesterday may not perform well tomorrow.
Conversely, a stock that performed poorly yesterday may perform well tomorrow.
Market conditions have a greater impact on prices than yesterday's stock price movements.

Third, it's obvious, but news is an unpredictable event.
It is possible to estimate whether a stock price trend will continue or reverse assuming there is no new news that affects the stock price.
When a new, unexpected event suddenly occurs, stock prices are naturally affected.
We cannot assume that past patterns will repeat themselves without considering the impact of unexpected events.
Fourth, chart patterns rely on subjective interpretation.
Interpreting charts in technical analysis is not perfect.
Subjective interpretations lead to incorrect predictions.
--- p.25 From “Why Chart Trading is Difficult to Succeed”

Investors participating in the market have different predictions about the future.
Trading means that someone is selling and someone is buying stocks of the same type.
The seller thinks the stock price is expensive, and the buyer thinks the stock price is cheap.
In other words, they reached different conclusions in predicting the future.
Now you probably have an idea of ​​what is important in stock investing.
It is none other than the ability to accurately predict the future.
The fact that there are counterparties in this world who stand in the opposite direction of our trading tells us that we will always encounter opinions that oppose our own.
So we are easily swayed by the atmosphere.
Moreover, if the stock I bought falls, I may be gripped by fear that it will fall further in the long run.
Conversely, you may be tempted to sell a rising stock out of fear that it has risen too much.
In order to not be shaken in this situation, I need to have a solid basis for my judgment that can support my trading actions.
In order to make accurate predictions compared to our trading counterparties, we need logical imagination.
I need to analyze the information I can obtain at the present time and make the most rational decision.
It is difficult to analyze all the information, but it is possible to determine the direction of movement to some extent.
One thing to keep in mind is that the world is not static, but rather constantly moving and changing.
No great company can exist in a stable state; it must adapt to the environment surrounding it.
--- p.47 From “Direction of Prediction”

Previously, we broadly divided investment target stocks into four types.
Rather than having the characteristic that stocks belonging to each group do not mix with each other, they may belong to multiple groups simultaneously.
Meanwhile, here we will introduce five types of companies that you should be wary of, without classifying them as investment targets.
If possible, we should exclude companies that fall into this category from investment targets and instead select companies that can provide sound future performance.

(1) Companies with weak financial structures
First of all, companies with unstable financial structures should be avoided.
Companies with excessive debt, that is, borrowings, or that frequently issue convertible bonds (CB) need to be cautious.
Convertible bonds are bonds that can be converted into stocks of the issuing company at the request of the bondholder if the stock price outlook of the issuing company is good. They are generally issued by companies with low credit ratings.
Some investors sometimes think that the issuance of convertible bonds is a signal of rising stock prices, but if a company expects its stock price to rise, there is little reason to issue bonds with the right to convert into stock.
Convertible bonds are bonds issued to raise funds by small or new companies that have difficulty issuing general bonds due to low credit ratings and to reduce the burden of high interest rates.
In addition, when the conversion right is exercised, it does not help existing shareholders because dilution occurs, which means the number of shares issued by the company increases and the existing shareholders' stake decreases.
A similar case is the issuance of a bond with warrant (BW), which issues warrants along with bonds.

(2) A small-cap company with a '乙' rating
Small cap, simply put, is a small stock, and cap is an abbreviation for market capitalization, which refers to the size of the company's market capitalization.
Market capitalization is calculated by multiplying the stock price by the number of shares issued.
In other words, small caps are stocks with a small market capitalization.
A company that is a small-cap stock and at the same time is in the position of 'B' in a 'business relationship' cannot be said to have stable business activities.
Companies that provide materials/parts/equipment to major companies, which are key players in the industrial ecosystem, are called small-scale companies or equipment companies.
These companies are fundamentally 'B' companies rather than 'A' companies, so it is difficult for them to become structural growth stocks.
There is an opportunity for growth only through strengthening cooperation with companies that are in demand.
The essence of these companies is manufacturing, and they manufacture and supply machinery, including materials and parts.
Unless a company boasts an overwhelming technological barrier, the margins are not that large.
Of course, if it is a company that boasts overwhelming technological prowess, even if it is in the '乙' position, it can be said that it is essentially in the '甲' position and is worth considering for investment.

--- p.81 From “Companies You Should Be Careful About Investing In”