Japan's stock market genius is Kawa Ginzo's secret to profit: turning 70 yen into 20 billion, but ultimately losing everything due to greed

Japan’s stock market genius, Kawaguchi Ginzō, dedicated his entire life to a battle between human nature and wealth. He built a billion-yen empire starting with just 70 yen, yet a moment of greed caused him to see 30 billion yen in profits vanish. His legendary life serves as both a textbook of financial wisdom and a stark warning about human weaknesses.

From Extreme Poverty to Sudden Wealth: The Revenge Path

Kawaguchi Ginzō was not born into wealth. Before age 30, he worked as an accountant and ran a casting business in China and London, but a failed investment drove him to rock bottom, forcing him to return to Japan in disgrace.

His turning point came at age 31. After deep reflection, Kaw decided to rewrite his destiny through knowledge. He immersed himself in economic books at Osaka Library for three years, trying to uncover the underlying patterns of investment. In 1931, armed with 70 yen borrowed from his wife, he officially entered the market.

This seemingly insignificant starting capital was backed by an extraordinarily determined heart. Kaw developed the habit of daily collecting market data, communicating with securities firms, and deeply understanding economic trends. This grassroots research laid the foundation for his later investment legend.

After World War II, during Japan’s reconstruction, Kaw saw that people would flood into buying prefabricated houses as temporary shelters and bought large quantities in advance. The price of corrugated iron indeed soared dozens of times, and his first big profit came from this.

By the 1970s, the first oil crisis severely hit Japan’s economy. The cement industry plummeted, with Japan Cement’s stock price crashing from over 800 yen to just over 100 yen. Kaw saw an opportunity—he predicted the government would use infrastructure projects to solve unemployment, so he bought大量水泥股。事實證明他的眼光，三年後他因此賺取了300億日圓。

The most famous case occurred in the 1980s. News that “Hishikari Mine may contain high-quality gold deposits” caught Kaw’s attention. He conducted in-depth investigations and concluded that the mine was a severely undervalued treasure. Even Sumitomo Metal Mining, the owner of the mine, did not fully realize its value.

Kaw quietly started buying the stock. When survey data confirmed his judgment, the stock price skyrocketed, rising more than nine times his purchase price in less than two months. This investment earned him 20 billion yen in profit and topped the personal income charts that year.

The Wisdom of “Eight-Tenths Full” Behind the Perfect Exit

The legend of Japan’s stock god is not only in his stock-picking eye but also in his ability to exit precisely before a crash.

In the Sumitomo Metal Mining case, as market enthusiasm pushed the stock to new highs, Kaw calmly took countermeasures—selling his holdings quickly and locking in gains. Remarkably, within three weeks, the stock price tumbled from its peak to one-third of Kaw’s selling price.

Why could Kaw be the only one to stay sober amid market frenzy? The secret lies in his self-created “Eight-Tenths Full” principle. He often said, “Selling stocks is like having dinner—only eating to 80% fullness is the realm of wisdom.”

This metaphor seems simple but reveals the hardest lesson in investing. Markets are always unpredictable, and optimistic sentiment can easily deceive and trap investors into the “wait a little longer, I can earn more” greed. Kaw believed that buying is easier, but the real skill lies in selling—knowing when to stop is what makes a true investment master.

When stock prices soar and the market is boiling, Kaw consciously restrains his desire and exits early. It may seem like he missed the last bite of meat, but in reality, he avoided the reversal caused by greed, preventing himself from ending up with paper wealth. This is the core reason he could frequently invest in high-risk cyclical stocks with little loss.

Systematic Investment Method: The Power of the Tortoise’s Three Principles

Beyond the “Eight-Tenths Full” mindset, Kaw developed a systematic investment approach called the “Tortoise’s Three Principles,” advocating steady, turtle-like progress to ultimately win the race.

First, discover overlooked potential stocks. Kaw focused on finding companies with bright prospects that the market had not yet recognized, then holding them patiently until the market awakens.

Second, insist on independent, in-depth research. He never blindly trusted positive news from newspapers or magazines, because “by the time the news hits the headlines, the stock price is often near its peak.” He personally collected data daily and monitored economic trends to ensure timely and accurate information.

Third, avoid excessive optimism and invest within your means. Kaw never believed in the myth that “the stock market only goes up.” He used only his own funds, never borrowing or leveraging. This conservative approach helped him survive multiple crises.

These three principles may seem simple, but they embody the deep logic of a winner—knowledge, patience, and humility are indispensable.

The Greed Trap: The Lesson from a 30 Billion Yen Loss

However, Kawaguchi Ginzō was ultimately human. In his later years, he fell prey to greed.

In the late 1970s, international prices of non-ferrous metals surged. Kaw, based on geopolitical analysis, predicted that the Soviet invasion of Afghanistan would further boost the market, so he heavily bought related stocks. As the market continued to heat up, Kaw, driven by greed, lost his rationality and refused to sell, missing the optimal exit point.

The result was a series of sharp declines, and the 30 billion yen in paper profits gradually evaporated, ultimately lost. This devastating failure starkly contrasted with his earlier “Eight-Tenths Full” wisdom.

Final Words

The life of Japan’s stock god is like an investment inspirational drama and a tragedy of human nature. He spent half his life proving how knowledge, patience, and self-discipline can forge wealth; yet his later regrets show how greed can destroy everything.

True investment wisdom is not about seizing every opportunity but about controlling one’s desires. Rationally entering the market and calmly exiting—do you hold the discipline to measure risk and reward steadily?