STE's Stocks Investing Journey

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, ...

  YT Video : Credit to: 小貝叔叔 Link: https://youtu.be/SH2RkVDbeVk?si=9V59V6UwDQ8iu43J "看完这集，你就能胜过9 成股市散户！｜ 冷眼孙子股市兵法：真正的投资心法" ( Watching this episode will allow you to surpass 90% of retail investors! | Cold Eye's Sun Tzu's Art of War for the Stock Market: The True Investment Mindset). The content draws from the author "Cold Eye's" 50 years of stock market experience, applying the ancient military strategy of Sun Tzu's Art of War to modern investing. "Translate and Summarize using AI tool : Google Gemeni" Executive Summary The video posits that the stock market is a modern battlefield where success is dictated by strategy, discipline, and preparation, not luck or emotion. Authored by the veteran investor known as "Cold Eye," the 54 chapters (or core lessons) are derived from the philosophy of Sun Tzu's Art of War. The central theme is that true wealth is built on an invincible mindset and rigorous calculation (Preparation and An...

The stock market often feels like a rollercoaster, but investing isn’t only about spreadsheets, ratios, or balance sheets. At its core, it’s a psychological journey. The market’s sharp swings and tempting narratives don’t defeat most investors ,our own instincts do. These instincts were shaped over thousands of years to help us survive, not to manage a modern portfolio. That’s where behavioral finance comes in. It shines a light on how emotions, biases, and mental shortcuts quietly influence our decisions, often to our detriment . By blending age-old wisdom with modern insights, we can better understand why investors stumble and how to avoid the same traps. Sun Tzu’s words from The Art of War still ring true: “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” In investing, the real enemy isn’t the market—it’s our own behavior . Learn to recognize it, and better decisions tend to follow. <Image credit https://jingyan.baidu.com/article/a3a3f...

Managing a portfolio is not a one-time effort. It is an ongoing journey of discipline, patience, adjustment, and self-awareness. For long-term value investors, the goal has always been the same: build a resilient structure that grows steadily and survives volatility. Markets will continue to shift between optimism and fear, yet the investor who has a strong foundation can navigate these waves calmly. Portfolio management isn’t glamorous, and it certainly isn’t about chasing short-term excitement. It is about creating a system that withstands shocks and compounds quietly in the background. When we examine successful long-term investors, the patterns are clear. Their strategies rest on a few important pillars: asset allocation, diversification, rebalancing, continuous review, risk management, and behavioral control . Each plays a different role, but together they form a complete framework :  A compass that helps you stay on course even when the markets are unpredictable. Asset Alloc...

You’ve probably heard the stories. Someone plows a modest sum , say, ten or twenty thousand dollars into a single stock like Nvidia, Apple, Tesla, or Meta, and poof! A few years later, they’re sitting on millions, sipping kopi at a fancy café while the rest of us slog through the daily grind. These tales of single-stock millionaires are the stuff of legend, the kind of financial fairy tale that makes you wonder if you’re missing out. But let’s take a step back and unpack this phenomenon with a clear head, because while the dream is seductive, the reality is a lot more nuanced. <Ai Image> The Allure of the Big Win The idea of turning a small investment into a life-changing fortune is intoxicating. Imagine catching the wave of Nvidia’s AI boom or Tesla’s electric vehicle revolution early on. You put in $20,000, hold tight, and suddenly you’re looking at seven figures. It’s not just about the money—it’s the bragging rights, the “I told you so” moment at the family reunion. These sto...

The Essence of Being a Contrarian When everyone rushes in one direction, the contrarian quietly walks the other way. This simple yet powerful idea forms the backbone of David Dreman’s classic “ Contrarian Investment Strategies: The Psychological Edge .” Dreman, a legendary Wall Street investor, explored not just the numbers behind contrarian investing but, more importantly, the psychology that drives markets i.e the very emotions that create bubbles, panics, and opportunities. <Ai Image> In this updated version of his work, Dreman reinforces one timeless truth: markets are driven more by human behavior than by pure logic. Investors as a collective are often guided by fear and greed, not by reason. As prices overshoot to the upside in good times and plunge too deeply in bad times, the patient contrarian finds value amid the noise. Reading this book reminds me of why I chose to invest differently , not to follow the crowd, but to think independently, to see value where others se...