The ultimate revelation from Japan's stock mogul: Why does the money you earn always end up losing back in the end?

When stocks surge to nine times their value, do you still dare to add more?

This is the litmus test to see if an investor is truly mature. The answer given by the Japanese stock legend is simple: sell when it’s time. Three weeks later, the stock price collapsed to one-third of his selling price, and he had already pocketed 20 billion yen.

But the ending of the story is quite ironic—this stock god in Japan lost 30 billion yen in profit in his later years due to greed, watching it vanish before his eyes.

Why do smart people also stumble?

Kawakami’s legend begins from extreme poverty. Before age 31, he experienced startup failures and investment losses, at one point having nothing. In despair, he secluded himself in a library in Osaka for three years, re-entering the market with just 70 yen.

This is not a story of luck. Kawakami’s success was based on deep market research. At the end of World War II, he foresaw a shortage of iron sheets and bought them, earning dozens of times the investment. In the 1970s, during a slump in the cement industry, he took contrarian positions and made a profit of 30 billion yen in three years. By the 1980s, he discovered the potential of the overlooked Rinko Mine, quietly bought shares of Tomin Metal Mining, and the stock skyrocketed to nine times.

Each time, Kawakami won huge profits through “insights ahead of others.”

Interestingly, his true excellence was not in stock picking but in knowing when to walk away.

The secret weapon of the stock god: the “80% full” rule

The market’s most confusing moment is when stocks skyrocket and everyone shouts they will rise further. At this point, most people are driven by greed, holding on desperately in hopes of more gains. Kawakami, however, did the opposite.

He compared investing to eating: “Eating until 80% full is the wisdom.”

This phrase seems simple but is profound. The stock market changes rapidly, and optimistic sentiment constantly pushes expectations higher. When you wait for the “peak,” you often miss the safest exit point. Kawakami would deliberately restrain himself during market frenzy, temper expectations, and exit early—seemingly earning less, but perfectly avoiding subsequent crashes.

This is not conservatism but a deep understanding of human nature: most people don’t earn the last penny because they always want to eat the last bite.

The steady “turtle philosophy”

Besides timing the top, Kawakami summarized three core principles:

First, discover overlooked potential stocks. Instead of following hot trends, look for opportunities with great prospects that are yet unnoticed by the public.

Second, conduct independent in-depth research. He never blindly trusted positive news from newspapers or magazines because by the time it’s reported, “the stock price is usually near the high.” He insisted on collecting his own information, analyzing data, and closely monitoring the economy and market daily.

Third, eliminate excessive optimism. He used no leverage, only his own funds, and didn’t believe the market only goes up. These seemingly conservative rules are actually safeguards to reduce deadly risks.

The core of this methodology is: slow is fast. Instead of chasing every profit, steadily earning most of the gains is the long-term winning secret.

The trap of human nature: how greed devours 30 billion

However, even the stock god is human.

In the late 1970s, international non-ferrous metal prices skyrocketed. Kawakami judged that the Soviet invasion of Afghanistan would push prices higher and bought related stocks in large quantities. As the market heated up, he surprisingly lost his composure—driven by greed, he refused to sell, completely missing the exit point.

The result? The 30 billion yen profit was wiped out as stock prices plummeted repeatedly. His once-admired “80% full” wisdom proved useless in the face of greed.

How cruel was this lesson? He used half a lifetime of wealth to gain a painful realization: entering the market rationally is easy, but exiting calmly is the hardest.

Reflection for modern traders

Why is Kawakami’s story worth paying attention to? Because it reveals the ultimate paradox of investing:

Knowledge and experience can be learned, but the hardest thing to control is always the beast called “greed” deep within human nature.

You might know to reduce your holdings during a surge but hesitate in the hope that “it might still go up.” You might understand the “80% full” principle but get overwhelmed by emotion during market frenzy. Why do retail investors always take the last hit? Because they are always betting that “this time is different.”

The Japanese stock god’s legendary life and painful lessons tell us: the ultimate winning move in investing is not stock selection ability but self-control.

Do you have the measure of risk and reward in your hands?