He once said he doesn't look at company fundamentals (financial reports, news, P/E ratio). Why does he consider this information "noise" for his short-term trading?

Hey there, friend! That's a really great question. Many people find it strange – how can you make money in stocks without looking at whether a company is good or bad? Japan's day trading legend B.N.F. (Takashi Kotegawa) is indeed an "outlier." Understanding his thinking can be incredibly helpful for grasping different trading styles.

Let me explain in plain language why, in his specific trading approach, things like financial reports and news are considered "noise."

Why Does "Stock God" BNF Think Reading Financial Reports is a Waste of Time?

Think of investing and trading as two different games:

Game A: Value Investing (Warren Buffett's game)
- Goal: To buy "shares" of a good company and grow slowly together with the company, enjoying the dividends and stock price appreciation resulting from the company's profits.
- Decision Basis: Is the company healthy? Can it generate profits consistently? Does it have a future? Therefore, you need to read financial reports, analyze the industry, and evaluate management.
- Timeframe: Measured in "years".
Game B: Short-Term Trading (Takashi Kotegawa's game)
- Goal: I don't care what this company does. I only care about the fluctuations in its stock price over the next few minutes, hours, or days. I profit from these price differences.
- Decision Basis: Right now, are there more buyers or sellers in the market? Is the momentum pushing the price upward or downward?
- Timeframe: Measured in "minutes", "hours", or "days".

Takashi Kotegawa plays Game B. Within the rules of this game, fundamental information becomes "noise." There are three specific reasons why:

1. The Time Dimension Mismatch: Long-Term Info Doesn't Fix Short-Term Needs

This is like the difference between checking the weather forecast and reading a climate report.

Fundamental Analysis (Financial Reports, P/E Ratios) = Climate Report It tells you whether a place (company) is "warm and humid" or "cold and dry" over the long term. It describes a long-term trend. For example, a quarterly earnings report summarizes the past three months and provides an outlook for the next year of operations. This is something very macro and long-term.
Technical Analysis for Short-Term Trading = Weather Forecast It tells you whether it will rain this afternoon or tomorrow morning, or how strong the wind will be. When you need to go out, you check the weather forecast, not a climate report.

Takashi Kotegawa only cares whether the stock price will rise or fall in the "next minute." Giving him a three-month-old report saying "this company was profitable last year" is meaningless to him. Because this information is too "slow." The market may have already digested it, or even overreacted to it. He needs the "weather right now" – the immediate supply and demand dynamics.

2. The Focus is Completely Different: He's Not Buying the "Company," He's Buying the "Volatility"

Simply put, long-term investors buy the value of a company. Short-term traders like Kotegawa trade market sentiment.

One of his most famous trading techniques involves "departure rates" (also known as "Bollinger Band squeezes" or volatility breakouts - the core concept is key). This is a technical term; simply understand it as: When a stock's price moves too far away from its normal trendline within a short period (sharp rise or fall), a corrective reversal is highly likely.

If a stock suddenly plunges 15% for some unknown reason, he would judge this as an "oversold" condition caused by market panic, expecting the price to quickly bounce back slightly. He would then rapidly jump in to buy, aiming to sell when the price rebounds 3%-5%.
Conversely, if a stock surges too violently, he might judge that the market is overly greedy and expect a brief pullback, possibly choosing to short the stock.

Look at this decision-making process. Does he need to care about "what this company is actually worth"? Not at all. He only cares if "the current price is too extreme" and "if market sentiment is excessively biased". A financial report saying profits grew 20% offers almost no help in judging "whether the stock price will bounce back within the next hour after a plunge." In fact, it would distract him from purely observing the changes in price action and trading volume on the chart.

3. The Market is a "Voting Machine" in the Short Term, Not a "Weighing Machine"

Benjamin Graham famously said: "In the short run, the market is a voting machine; in the long run, it is a weighing machine."

Weighing Machine: In the long run, the market eventually assigns the appropriate "weight" (stock price) to what a company is truly worth. Good companies will rise over time. This is the cornerstone of fundamental analysis.
Voting Machine: In the short term, stock prices are determined solely by market participants "voting." When news comes out, if people think it's positive, they vote (buy), and the price goes up. If people panic, they vote (sell), and the price goes down. This vote often has little to do with the company's intrinsic value; it's pure emotion and momentum at play.

Takeshashi Kotegawa is a master "vote observer." He uses charts like candlestick patterns and volume data—which directly reflect "voting" activity—to judge how people will vote next and then positions himself early. How "fat" or "thin" the company itself is (its intrinsic value) is simply not his focus. Reading financial reports and news means looking at information relevant to the "weighing machine," but he's playing a game solely in front of the "voting machine." The information is thus mismatched and becomes noise.

To Summarize:

Takashi Kotegawa ignores fundamentals not because they are useless, but because within his ultra-short-term trading system, fundamental information is "noise" – it comes from the wrong timeframe, operates in the wrong dimension, and focuses on the wrong things. He's like a top surfer solely focused on the shape of the waves. Trying to discuss the long-term hydrological features or ocean currents of that seascape would only distract him from catching the next perfect wave.

Hope this analogy helps you better understand his mindset!