[Investment Philosophy] 2025 Annual Review (Long Article)

0xdylan joined discussion · Jan 7 11:45

1. Mooers of the Year
In April 2025, I joined the moomoo community and began systematically sharing my thoughts on stock investment operations, practical experiences, and my understanding of the investment philosophies from several economic and financial investment books I've read. Over time, I gradually discovered that the community appreciates longer, logically complete analysis content, which has given me the opportunity to continuously write more in-depth and structured reflections.

[Investment Philosophy] 2025 Annual Review (Long Article)

Yesterday, I learned that I received the Mooers of 2025 annual recognition. This affirmation is both a surprise and a reminder for me. I want to thank every community member who has been willing to read, discuss, and offer different perspectives. Moving forward, I will continue to combine the insights gained from classic investment literature and methodological frameworks with real-world market experiences, presenting them in an intuitive and reviewable manner to share with everyone continuously.

If you want to gain a more systematic understanding of my investment style and the underlying thought process, you can refer to this previous interview by moomoo via the link 🔗: 👉 An INTJ Architect's Investment Philosophy

2. Stock Operations
Given the decent overall return on stocks over the past year, I recalibrated my goals for stock investments.After recently reading some works and interviews by Duan Yongping, I have become even more aligned with his emphasis on long-termism and anti-speculation principles. As a result, I’ve let go of the fixation on 'beating the S&P 500 every year' (Although the past three years have indeed outperformed）。

Among the more than thirty books on economics, finance, and investment that I have read, Duan Yongping's 'The Great Way' is one of the most difficult to fully digest. It essentially negates the path to wealth based on speculation and short-term trading. Because of this, I gradually understood why, after Steve Jobs passed away and Tim Cook took over, Duan Yongping still dared to heavily invest (over 60% of his U.S. stock portfolio in a single stock) in Apple. This kind of operation can only be truly justified after understanding the insights from this book."Buying a stock is buying into a company; buying a company means buying its discounted future cash flow."These two simple sentences are not deeply understood by many people.

Position holding
My investment approach is closer to Peter Lynch’s style: only buy stocks I understand, hold multiple stocks, but maintain clear distinctions between positions. Some are long-term core holdings, some are observation positions, and others are small speculative experiments for research and writing purposes. Therefore, my operations are not suitable for simple replication.

However, I don't mind sharing my position logic in a categorized manner. In terms of results, I almost never hold stocks that are currently popular. The companies I truly invest heavily in are either those whose business models I deeply understand or those whose products I have used for a long time and firmly believe in their value.If a company I hold starts being widely discussed by the market as a 'hot stock,' it often means I've already completed my position building before many people paid attention or when it was at a low valuation that no one wanted to buy, such as Palantir, Pop Mart, Alibaba, CATL…

One core discipline I’ve set for myself is: not to chase the hottest money right now. These opportunities might offer substantial short-term gains, but they fall outside my circle of competence (since I believe my ability to read charts and patterns can't compete with the AI used by quant funds). As Duan Yongping says in his 'stop doing list,' this is a type of action I explicitly avoid. I only accept and earn money within my cognitive range.

Because of this approach, there have hardly been any substantial losses in my equity portfolio. Currently, almost none of my holdings are in the red, except for Figma, which is an observation position that I’m optimistic about long-term, showing a paper loss of -14%. In my view, this isn’t a source of stress, but rather a range where I need to continue tracking fundamentals.

My current holdings allow me to sleep well at night because if the market enters a prolonged bear market in the future and I experience significant unrealized losses without major changes in fundamentals, with prices notably lower than intrinsic value, I would actually be pleased. This would present an even better opportunity to increase my position. This is also one of the reasons why I don't engage in short-term trading. In this regard, my understanding fully aligns with what Buffett has said. “If you initially planned to buy some eggs 🥚 and then the market drops prices, shouldn’t you be happy?”

"If you expect to be a net saver during the" Over the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect, they feel happy because prices have risen for the 'things' they think they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices—Letter to Shareholders, 1997.

Since some of my long-held U.S. equities haven't been transferred to moomoo yet, I’ve replaced the full-year P/L with a screenshot from Yahoo Finance for tracking purposes.

US Stock Holdings (Profit 92.95% in 2025)
Growth Stocks: $Palantir (PLTR.US)$ ， $Futu Holdings Ltd (FUTU.US)$ ， $Coinbase (COIN.US)$ ， $SoFi Technologies (SOFI.US)$ ， $Amer Sports (AS.US)$ ， $PDD Holdings (PDD.US)$ ， $Uber Technologies (UBER.US)$， $Figma Inc (FIG.US)$
Compound Value Stocks: $Taiwan Semiconductor (TSM.US)$ ， $ASML Holding (ASML.US)$
Value Recovery Stocks: $Adobe (ADBE.US)$ ， $Lululemon Athletica (LULU.US)$
Speculative Stocks: $D-Wave Quantum (QBTS.US)$ ， $IonQ Inc (IONQ.US)$ ， $Bullish (BLSH.US)$

US stock P/L

Australian Superannuation Account DIO Holdings (Profit 65.75% in 2025)
Growth Stocks: $Nextdc Ltd (NXT.AU)$ ， $WiseTech Global Ltd (WTC.AU)$， $REA Group Ltd (REA.AU)$
Compound Value Stocks: $Insurance Australia Group Ltd (IAG.AU)$ ， $Cochlear Ltd (COH.AU)$ ， $ResMed Inc (RMD.AU)$ ， $Technology One Ltd (TNE.AU)$ ， $CAR Group Ltd (CAR.AU)$
Value Recovery Stocks: $IDP Education Ltd (IEL.AU)$ ， $Treasury Wine Estates Ltd (TWE.AU)$

Australian pension account Australian stock P/L

Australian Stock Regular Account Holdings (Profit 82.65% in 2025)
I would like to elaborate on this point. From a broader perspective, I am not optimistic about individual investors achieving significant compound growth in the long term through the Australian stock market. In the Australian market, there are many companies that rely heavily on cyclical or single-resource drivers and struggle to return to their previous highs for years after an initial surge. This, to some extent, reflects how geographic location and industrial structure constrain the long-term operational ceiling of businesses.

For this reason, over the past few years, I have gradually reduced the proportion of Australian stocks in my personal investment portfolio and shifted more capital towards the US stock market. My continued holding of Australian stocks is partly due to structural and institutional constraints within my accounts — for example, pension accounts can only be allocated to Australian stocks or Australian versions of US stock indexes. Additionally, it reflects my assessment of the valuation cycles and positions of certain individual companies.

The Australian stocks I currently hold were primarily value recovery plays entered during the pandemic and have been held until now. From an investment characteristics perspective, these are more inclined towards cyclical assets, such as $Origin Energy Ltd (ORG.AU)$ and $Qantas Airways Ltd (QAN.AU)$ They do not fall into my definition of long-term compounding enterprises but are rather allocation choices valid within specific cycles and valuation ranges.

Therefore, the fact that this account achieved relatively high returns over the past year does not mean that my overall judgment on Australian stocks has changed. On the contrary, this is more like a phased result (value recovery caused by the pandemic; if it weren’t for the pandemic, I would hardly have touched airline stocks), rather than a core component of a long-term strategy. In terms of asset allocation going forward, I will still prioritize a global perspective and focus on long-term competitive advantages and sustainable compounding ability as the primary criteria.

Ordinary account Australian stock P/L

Hong Kong Stock Holdings (Profit 68.95% in 2025)
Growth Stocks: $POP MART (09992.HK)$ ， $XIAOMI-W (01810.HK)$
Compound Value Stocks: $CATL (03750.HK)$ ， $TENCENT (00700.HK)$
Value Recovery Stocks: $BABA-W (09988.HK)$ ， $MEITUAN-W (03690.HK)$

Hong Kong stock P/L

3. Options Operations

Over the past few years, through reading and practice, I have developed a relatively stable overall framework for common stock investment. This year, I chose to systematically study options, partly out of a need to expand my knowledge, and partly because I hope to provide more effective hedging tools for the downside risk of common stocks in a bear market at the portfolio level.

Over the past year, I started by understanding $CBOE Volatility S&P 500 Index (.VIX.US)$ and gradually experimented with 0DTE end-of-day options represented by $Invesco QQQ Trust (QQQ.US)$ as well as short-term options within a 7–21 DTE cycle. I experienced both profits and losses. Overall, this was clearly a 'tuition-paying learning process'.

My view on learning options is quite straightforward:
As long as the cost is lower than the time and financial investment required for systematically attending university to study another major, and the process is reviewable and correctable, such tuition is acceptable.The premise is that I clearly understand that I am learning operations and risk management, rather than making directional bets driven by emotions.

As previously mentioned,In 2025, there was almost no significant loss in the common stock portion; the main drawdowns came from options operations.A significant portion of these occurred during my initial exposure to options when my understanding of pricing and time value was still insufficient. For instance, when I felt that US stocks were generally overvalued, I purchased long-dated protective puts (on QQQ, Palantir, for example). However, due to underestimating time decay and inaccurately assessing support and resistance levels, these hedges ultimately failed to achieve their intended effects.

Looking back, these operations did not constitute reasonable hedging but were more like costly 'emotional insurance.' This was also an important reason for my subsequent systematic adjustment of options strategies. I will write a separate article later, specifically outlining how to hedge common stock risks in a more reasonable and controllable manner.

Moreover, individual single-trade losses also stemmed from insufficient understanding of event-driven options. For example, before the $Uber Technologies (UBER.US)$ earnings report, my judgment on volatility and pricing structure was not mature enough. Although the directional judgment wasn’t entirely off, the choice of option structure was not reasonable. Fundamentally, such errors still fall under cognitive deficiencies rather than market unpredictability. Personally, I’m not optimistic about $Opendoor Technologies (OPEN.US)$ This pure narrative lacked fundamental support for valuation, so I decided to express this view through puts. However, in practice, I underestimated the influence of retail sentiment and speculative capital on the short-term movements of small-cap stocks, ignoring the reality that prices can deviate from fundamentals for an extended period. Moving forward, I will remain cautious about small-cap stocks.

Overall, options have not changed my fundamental stance on long-term investing. On the contrary, this phase of learning has made it clearer to me: options are tools, not a source of income per se. Before having a stable and repeatable approach, I prefer to limit their use to learning and risk management rather than increasing their weight in the portfolio.

I see many moomoo friends are enthusiastic about 0DTE; here’s an article I wrote earlier, hoping it helps with understanding 0DTE, link 🔗: 👉 Why I Gave Up on 0DTE End-of-Term Options

4. Learning and Improvement

Looking back at investment decisions from the past two years, my focus on fundamentals was not systematic; it was more停留在结论层面而非过程层面 (stayed at the conclusion level rather than the process level). This approach worked at certain stages, but for growth stocks that require long-term heavy positions, it clearly wasn't robust enough.

Therefore, in 2025, I invested a significant amount of time re-examining the fundamental logic of the companies in my portfolio, including multi-year financial data, business model evolution, and changes in competitive dynamics.At the same time, I also began deepening my understanding of price action, learning how to use charts and structures to assist in position and trade management decisions under the premise that fundamental judgments hold true, rather than replacing those judgments.

The core goal of this round of learning is not to improve short-term win rates, but to enhance the 'certainty when making significant investments.'I care more about whether I've done enough homework before making a judgment and whether I truly understand why this company is worth holding for the long term.

I've also compiled some related thoughts into several articles, such as the breakdown of Figma's business model and the discussion on what valuation range makes Netflix a safe investment. These pieces essentially revolve around the same question:
Before buying a stock, to what extent do you need to understand it to justify holding it long-term? I think retail investors could avoid a lot of unnecessary losses if they spent more time researching before purchasing stocks.

链接🔗：👉 An article to fully understand Figma

链接🔗：👉 What price range offers a margin of safety for Netflix

5. Conclusion

Finally, over the past year, I was honored to attend the offline dinner event organized by moomoo in Melbourne, where I had face-to-face exchanges with many moo friends. What made me happy was not the specific discussion of any particular stock, but discovering that everyone is showing increasing interest in how to understand a company and establish long-term judgment.

Whether it’s common stocks, options, or assets with relatively strong recent performance, I see all of these as outcomes at the end of the day.What truly matters remains the underlying research process, the fundamental logic, and the ability to maintain clear judgment across different market environments.

Precisely because of this, I hope that through continuous sharing, attention can gradually shift from short-term fluctuations back to the company itself, its business model, competitive advantages, and long-term value, rather than repeatedly speculating around narratives lacking fundamental support.

Returning to the core principle repeatedly emphasized by Duan Yongping, which aligns with Warren Buffett's philosophy:"Buying stocks is essentially buying companies, and buying companies ultimately means buying the discounted future cash flow."