My Experience with Speculation: The Trade That Cost Me Half My Assets, and the Win That Wasn't Worth It

"Isn't there a better way to grow my money than index funds?" Once your income goes up from side shifts, I think it's a question you'll ask yourself at least once.

I started investing just before the COVID crash in 2020, and I've seen both the plunge that followed and the rise after it. I've tried domestic and foreign stocks and bonds, mutual funds, and even FX (foreign exchange), CFDs (contracts for difference), and crypto. I've lost big, and I've also won just as I planned.

In this article, I look back on my own trades to consider whether there's any point in weighing various factors and trading in and out.

Conclusion

Even if you weigh various factors and trade in and out, it's doubtful you can beat someone who just buys index funds without thinking. So I don't recommend spending time on study, taking on risk, and scrambling around.

First, I'll look back on a trade I lost and a trade I won, both the result of weighing various factors and trading. Next, I'll explain that even the win may have been luck, and how people who bought without thinking did over the same period. Then I'll explain why I don't recommend scrambling around.

I Read the Indicators, Sold, and Lost Half

A chick doctor on a hilltop looking through a telescope, spotting dark rain clouds spreading across the distant sky and pointing at them with a wing

First, the losing story: I saw signs of a recession, shorted the Nasdaq, and lost about half my assets.

In the US, starting in July 2022, the yield curve stayed inverted (short-term rates higher than long-term rates) for a little over two years, a state said to be a precursor to recession.

In August 2024, rising unemployment led other indicators to signal a recession as well.

FRED: 10-Year Treasury Minus 2-Year Treasury・FRED: Sahm Rule

A chick doctor turning pale while looking at a lighter wallet, still holding a flag with a downward arrow, in front of a thick bar shooting upward

After comparing indicators like these, I shorted the Nasdaq around August 2024 and held the position for about half a year.

As you know, the Nasdaq kept rising during that time and ended up about 20% higher.

Because I was using leverage, which lets you trade many times the amount of your own capital, my losses grew large.

I Bet on a Market Overreaction and Won

A chick doctor calmly studying, arms folded, a sheet of paper on a desk showing a line chart that suddenly drops sharply

Next, the winning story: I judged Kobayashi Pharmaceutical's stock to be oversold after its red yeast rice (beni-koji) problem, and bought it.

In March 2024, Kobayashi Pharmaceutical announced a voluntary recall of "Beni-koji Choleste Help" and other products. Health problems, including kidney disease, had been reported.

The share price fell from about ¥6,000 before the announcement to about ¥4,900, roughly 20% lower, within a few days.

My memory is hazy, but I think news reports at the time said about 100 people had been affected. Seeing this news, I wondered whether the market's reaction was excessive, and started analyzing.

A chick doctor holding a magnifying glass and closely inspecting, from the side, a scale tilted too far to one side

Here is the estimate I made over about three hours.

Item	Estimate	Reasoning
Red yeast rice-related sales	Just under ¥1 billion	A rounding error even if lost
Compensation	¥10–20 billion	1,000 victims × ¥10–20 million per person
Recall costs	¥1 billion	Same as the sales
Total	¥11–21 billion	Less than 5% at most against a market capitalization of about ¥450 billion

A chick doctor standing a long pole beside a tower of blocks that grows taller bit by bit, tying a small flag at the height they've decided is the limit

Since the reports were just starting to come out, I expected the number of victims to grow. But proving a causal link to acute kidney injury on the scale of tens of thousands of people seemed unlikely, so I assumed about 1,000 people at most.

For the amount per person, I used the relief payments from the hepatitis C litigation (¥20 million for chronic hepatitis) as a benchmark and assumed ¥10–20 million.

PMDA: Payment of Relief Benefits to Specified Hepatitis C Virus Infected Persons

A chick doctor lightly tapping the door of a sturdy, solid safe and pressing an ear to it as if checking how full it is inside

I also checked the finances. Cash flow was fine, and at this scale, with interest rates as low as they were then, I figured it could get loans if worst came to worst.

Beyond the numbers, I made the following judgments.

Brand: shoppers aren't that aware of which products are made by Kobayashi Pharmaceutical
Other products: even if pulled from store shelves, they'll be back soon
Share price: a popular, stable company, so it will settle down quickly

A chick doctor holding up a large sheet showing a curve with a tall peak on the right and a long thin tail to the left, plus a single vertical line drawn to the left of the peak, and pointing at the line with a wing

Based on these judgments, I estimated the fair share price at about 5% below where it was before the news. Since it had fallen about 20% at the time, a recovery to that level would mean +15%, and a recovery to the original price would mean +20%.

So I bought at around ¥5,000.

A chick doctor holding a small hourglass whose sand has run out, carrying a basket with just one picked fruit, and walking away from the tree looking satisfied

My bet was on just one thing: "the market's reaction to the red yeast rice problem is excessive."

I decided not to bet on the company's business performance itself, and set the holding period at one month. The longer you hold, the more the share price moves on business performance rather than the red yeast rice problem, and that becomes a different bet.

One month later, in late April, the share price was about ¥5,600, +12% from my purchase price. Over the same period, the overall market was flat or slightly down, so it didn't just rise along with the market.

The one thing I bet on turned out right, and the share price recovered to roughly where I'd expected.

Even the Win May Have Been Luck

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Looking back, though, the reasons I won are shaky. Now I can check my estimates from back then against what actually happened.

Item	My estimate then	Actual
Victims	1,000	About 520 eligible for compensation (as of September 2026)
Compensation per person	¥10–20 million	Unknown
Total compensation and recall costs	¥11–21 billion	Cumulative red yeast rice-related losses of ¥16.3 billion through the end of 2025. This figure combines recalls, handling of business partners, and compensation to victims; no breakdown has been published

Kobayashi Pharmaceutical: Compensation Progress・Kobayashi Pharmaceutical: Recording of Extraordinary Losses (2024)・NHK: Compensation and Other Costs of Over ¥3.6 billion (2025)

A chick doctor looking down at a jigsaw puzzle that fits perfectly in its frame, eyes wide on noticing it's filled with pieces of shapes different from what they expected

The number of victims was about half my estimate. Even so, the total loss falls within my estimated range. In other words, at least one of the per-person compensation or the recall costs was larger than I estimated.

My assumptions were off, and the total landing within my range was a coincidence.

A chick doctor holding a bent bow, tilting their head while looking at an arrow stuck in the center of the target

Making a profit is an outcome, not proof that my judgment was right. A single win or loss can't tell you whether it was skill or luck, and I may simply have been lucky.

People Who Didn't Think Did Well Too

A chick doctor sweating with an armful of documents, eyes wide at a piggy bank swelling beside a differently colored little bird napping in a hammock

Meanwhile, people who simply bought index funds without thinking were getting quite good results too.

During the half year I was shorting the Nasdaq, people who were buying the Nasdaq grew their money by about 20%. Over all of 2024, the year of my red yeast rice trade, just putting ¥1 million into the popular all-country fund nicknamed "Orukan" in Japan would have grown it by ¥325,000 in a year.

Mitsubishi UFJ Asset Management: eMAXIS Slim All Country World Equity (All Country)

A chick doctor glancing up at a wall clock, comparing a small pile of coins on the desk with a tall stack of documents, and sighing

So, do I recommend spending time on study, taking on risk, and scrambling around in various ways? No, I don't.

First, there's the time it takes.

The three hours I spent analyzing the red yeast rice problem come to ¥30,000 in labor costs at ¥10,000 an hour. Even if I'd gotten the +15% I expected, I'd have needed to put in ¥200,000 just to break even.

A chick doctor studying surrounded by piles of thick books, looking up through the window at a tall building where large birds operate rows of screens

Also, it only took three hours because I had built up experience before that. Without that experience, I think it would have taken longer, and you need time to study the basics in the first place.

A chick doctor holding a fishing rod, sitting on a pier for a long time waiting for fish to occasionally leap from the water

Besides the red yeast rice trade, I've made small trades around occasional events, such as trades taking the opposite side of the Japanese government's currency interventions, and trades capturing price gaps between gold CFDs with different maturities.

But opportunities like these don't come along all the time.

A chick doctor clutching a bag of coins, watching outside from the window all day long, with dark circles under their eyes

Since you never know when an opportunity will come, you have to keep watching the market and keep money set aside for it.

Money set aside has an opportunity cost. You miss out on what it would have earned in index funds.

And while you hold a position, you stay braced for bad news, which is a mental burden too.

If You Want to Grow Your Money, Use Index Funds

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To sum up, even if you weigh various factors and trade in and out, if you lose, you may lose half your assets as I did. Even if you win, the reasons are shaky and it may have been luck.

Meanwhile, people who held index funds without thinking were also getting good results. Honestly, I think weighing various factors and trading in and out has a low expected value.

If all you want is to grow your money, simply working as a doctor is faster. All the more so while your total assets are still small.

Index investing, on the other hand, gets you the average of the whole market without having to think.

A chick doctor closing the door of a shed where the fishing gear has been put away, happily heading back to their room carrying a closed laptop and a paintbrush

But if you can enjoy the analysis itself rather than the profits, that's a different story. As a hobby, I think it's perfectly fine.

Until a few months ago, I myself was analyzing individual stocks bit by bit and enjoying the analysis itself. Now my interest has shifted to this blog and other hobbies, and I've wound down my positions to some extent.

Index funds for growing your assets, and anything else only to the extent you can enjoy it as a hobby: that's my answer.

I write about exactly how to invest in the next article.