STE's Stocks Investing Journey

When most people talk about the stock market, the conversation usually revolves around company earnings, interest rates, inflation, or the latest geopolitical conflict. These are all important factors, but I have always felt that they do not tell the whole story. Beneath everything we see on the surface lies another force that quietly influences the direction of the market every single day. That force is capital flow. <AI Image> Capital flow is rarely discussed by retail investors because it cannot be seen directly. Unlike earnings reports or economic data, there is no headline telling us where every dollar is moving. Yet, if we pay close attention, we will notice that almost every major move in the stock market begins with money flowing into one area and leaving another. In many ways, the stock market is simply a reflection of where capital chooses to go. The World Has Changed Since the Global Financial Crisis The investing landscape today is very different from what it was befo...

For many of us who have spent years navigating the Singapore and regional markets, we often get bogged down by the "noise." We look at quarterly earnings, we obsess over whether a REIT's occupancy dropped by 1%, or if a company’s CEO had a bad day during an analyst call. But after decades of investing, I’ve realized there is a much bigger tide at play. It’s not just about the ships; it’s about the water level. In economics, we call this the M2 Money Supply . In plain talk, it’s just how much "stuff" is circulating in the system. When the taps are open, everything feels like a genius-level investment. When the taps close, even the best companies struggle to keep their heads above water. Let's peel back the layers on how this liquidity truly dictates the price of our assets. < Image credit:www.econovis.net> Why "Inflation" Isn't Always What You Think It Is When most people hear "inflation," they think about the price of chicken r...

Today, I’d like to take a deep dive into the fascinating world of global finance and explore how global liquidity has reshaped the stock market since the Global Financial Crisis (GFC). Over the past decade and a half, central banks around the world have been pumping money into the financial system, almost as if cash could grow on trees.  This wave of liquidity has changed the way markets move, fueling long bull runs and altering the nature of bear markets. In this post, we’ll unpack what this “ flood of money” really means, how it has transformed investor behavior, and why understanding liquidity has become essential to making sense of today’s financial landscape and what does that mean for bear markets, investor confidence, and the long game? Liquidity: The Market’s Lifeblood Let’s start with the basics. When we talk about liquidity in the context of global markets, we’re talking about the cash (or near-cash) that central banks like the US Federal Reserve (FED), European Central...