Mental Models That Help You Maneuver the Stock Market
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...
