STE's Stocks Investing Journey

Over the years, I’ve realized that investing isn’t really about finding the perfect stock or predicting the next big move. It’s more about how we think. Two people can look at the same balance sheet, the same chart, the same news, and walk away with completely different conclusions. The difference is rarely intelligence. It’s the mental model they’re using, often without even knowing it. Mental models are just ways of understanding the world. Simple ideas that help us make sense of messy reality. In the stock market, where noise is loud and emotions run high, having a few good mental models can keep you grounded. Not to make you smarter than everyone else, but to stop you from doing stupid things at the wrong time. Here are some mental models that have quietly shaped how I navigate the market. <Ai Image> The Pari-mutuel System The stock market works more like a betting system than most people realise. In a pari-mutuel system, your payoff doesn’t depend on whether you’re right...

When I first started investing, I believed the usual story. Read the financial statements, find good companies, buy at a reasonable price, and let time do the rest. On paper, it sounded simple. But reality has a funny way of humbling you. Over time, I realised that the biggest challenge in portfolio management isn’t finding information. It’s dealing with ourselves. Fear, greed, impatience, overconfidence ,  these emotions quietly shape our decisions every day, often without us noticing. That’s where behavioural finance comes in. Not as some academic theory, but as a practical lens to understand why we do what we do in the market, and how that behaviour affects long-term results. If you ignore this part of investing, even the best strategy can fall apart at the worst possible time. <AI Image> Behavioural Finance: The Missing Piece in Portfolio Management Behavioural finance sounds like a complicated term, but the idea is simple. It studies how real people behave with money, n...

This is my first blog post of 2026, so let me start by wishing everyone a Happy New Year . I hope 2026 will be kind to all of us, with good health, steady income, and returns that are at least as decent as what we experienced in 2025. No need for anything spectacular, just consistent and sensible gains will do. 😊 Before rushing into new plans and ideas for the year ahead, I find it important to pause and properly review the past year. Investing is a long journey, and these yearly check-ins help me stay grounded, remind myself what worked, what didn’t, and what I should not take for granted.   How 2025 Started – Strong Momentum, Then a Reality Check   2025 actually began on a very positive note. The first quarter was strong, and the portfolio continued the good momentum from late 2024 with double-digit returns in the first Qtr. Prices were moving up, dividends were coming in nicely, and on paper, everything looked great. Then April came. The market correction that hit in April...

This lecture, delivered by Professor Jake Xia to   MIT OpenCourseWare class, provides a comprehensive and critical application-based perspective on portfolio management, moving beyond traditional theoretical frameworks to address the realities of investment and risk. <Ai Image > Executive Summary: Portfolio Management Beyond Theory This presentation offers a rigorous, application-focused deep dive into modern portfolio management, critically evaluating established theories and proposing practical, behavioral-based enhancements. The central challenge in investing is fundamentally a sizing problem : determining how much capital to allocate to any given investment, a decision dictated by clear objectives, time horizon, and loss tolerance. The lecture contrasts personal finance with institutional investing, highlighting the Endowment Model used by perpetual funds like MIT's. These institutions have a crucial nominal return target (e.g., 8%) to cover spending and inflation, ...