The potato expedition!!!

Imtiaz Gadar, CFA is the Head of Public Markets at Bank Alfalah, Pakistan. Previously he served as the Head of Research at KASB Securities (Partner of BOA Merill Lynch) as well as JP Morgan. He was ranked as the best analyst in Pakistan four times by Asia Money and the CFA Association of Pakistan. He also served as the Vice President of the CFA Society in Pakistan.

Disclaimer: The post has Urdu in between because English alone would not fully capture the concept. 

Recently, while scrolling through my social media account, I saw a capital markets colleague had shared a picture with his wife where both of them were out shopping. My idle mind suddenly started visualizing what would happen if us capital market folks combined our professional roles with household roles (e.g. shopping). For instance if wife calls husband and asks him to buy 2 kgs of potatoes on the way back to home.


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Institutions gate crash the wedding

Imtiaz Gadar, Guest post - The Asif Khan Blog

Imtiaz Gadar, CFA  follows up on his hilarious post on retail investor behavior during bull runs. Check out his first write-up here. For the lazy ones who do not want to read earlier posts, here is a short profile of him. Imtiaz Gadar is presently the Head of Public Markets at Bank Alfalah and was the Head of Equity Research at KASB-Merrill Lynch Pakistan and JP Morgan Pakistan in the past. He was also voted the best equity analyst of the country four times.

Following my first guest post on Asif’s blog, “How bull markets find their way to weddings”, some of my retail investor friends were offended and thought I was too harsh on them. This happened because I didn’t really say much about the BIG FISH, i.e. the institutional players (brokers, fund managers etc). So, as a gesture of goodwill to all those offended old friends (and to offend some new ones), here is my take on the different species of institutional players you come across at a bull market wedding.

Specie # 1: The Blackrock’s and Fidelity’s of the local market

These are all seasons, 24/7 popular guys, with popularity being directly proportional with Assets Under Management. They don’t really have to move from their spot once they enter the wedding. They just attract attention. Whether you like them as people or not, you still will gather around them to hear their thoughts, to get a sense of their next big move, given the impact it can have on the relatively shallow markets that frontier/emerging markets can be. In short, everyone wants to smellllllllll what THE ROCK is cooking!

Specie # 2: The Worried Bear

Market has rallied, but this guy will sound the most worried. He will give you 101 reasons why the bull run is not sustainable. He will cite newspaper headline of 3 weeks ago as very concerning to him, in spite of the fact that the market has rallied another 20% since that headline first appeared. He will give you reasons for being bearish which you will find a little exaggerated and at times really convoluted. But the trick is to know why he is doing it?

In reality he is invested up to his nose and is enjoying the returns he has made in the last few weeks. What he really wants from you is the assurance that the bull run is intact and healthy and that he has done the right thing. So basically it’s an argument you can’t lose, because he REALLY REALLY wants you to win.

Specie # 3: The Angry Bear (not to be confused with The Worried Bear)

When the benchmark index was at 102, he thought the attractive entry point was 100. The market corrected to 101 but he stuck to what his fundamental valuation models told him. In fact, the correction from 102 to 101 reiterated his belief in his model. But sadly for him, the market rebounded from 101 and is now trading at 120. He hates the market for it and all the imbalances, flaws, manipulation and speculation that have led to the unrelenting rally from 101 to 120. He is grumpy and dismissive of bulls. However his most outstanding trait is that the minute market will correct from 120 to 115, he will jump head first into the manipulated, speculative, flawed and imbalanced bull market and turn into Species # 4, i.e. Tarzan

Specie # 4: The Tarzan Bull

There are bullish investors, there are very bullish investors and then there are Tarzan Bulls. In bull markets, they literally swing from tree to tree with their trademark cry, spreading their bullish ideas to anyone who cares to listen or even to those who don’t care to listen. All the third tier stocks that rally like crazy in bull markets, should thank Tarzan for their day in the sun.

Specie # 5: Last but not the least…..  The Brokers

For brokers, bull market weddings are like a session at the gym. You do occasionally stop and nod to your fellow gym mates (read brokers) but you are really just concentrated on your run-and-weights routine which goes like this:

Run – stop at fund manager 1- Do some weights (depending on fund size)

Run – stop at fund manager 2 – Do some more weights

Run – stop at fund manager 3 – Further weights

Repeat till you have done the full circle

If the number of fund managers is limited, do the above routine twice

Just like a late night gym work out can feel very nice the next morning, doing this ‘lifting’ session right can feel very good next morning, once the market opens and the brokerage income starts to flow.

Disclaimer: I am still a sell-side guy at heart, so count me as a broker but in my last year on the buy side, I have been all the above species. So I hope it’s taken in the way it is meant to be i.e. humor.

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Imtiaz Gadar on ‘How bull markets find their way into weddings’

Imtiaz Gadar, CFA is the Head of Public Markets at Bank Alfalah, Pakistan -The Asif Khan Blog

Imtiaz Gadar, CFA is the Head of Public Markets at Bank Alfalah, Pakistan. Previously he served as the Head of Research at KASB Securities (Partner of BOA Merill Lynch) as well as JP Morgan. He was ranked as the best analyst in Pakistan four times by Asia Money and the CFA Association of Pakistan. He also served as the Vice President of the CFA Society in Pakistan.


Since this is a finance related blog page, I felt it my duty to ensure that my friend Asif’s blog doesn’t run too dry. So here is some relatively lighter stuff.

If you are linked to the investment business (especially stock market), you might have had a similar experience, that, during bull markets, going to a wedding is like a deep-sea dive into the Pacific Ocean. The different breeds of sea-animals (investors, wanna be investors, speculators) that you come across is amazing.

People who are waiting for their cabbie or plumber to discuss stocks for them to conclude that the stock market is in bubble mode are way behind the curve. They should just go to a wedding and they will know the extent of the bubble.

At first I used to be amazed at the variety, just like a first time deep-sea diver but then I slowly started noticing a trend and categorized them in breeds.

Below is my personal classification of the breeds. Would be happy to hear any other variants you would have met.

Breed # 1: Frequent suspects: The ‘hot tip’ seekers

This is the most common breed and their pace of reproduction increases manifold in bull markets. Some of them are courteous enough to strike a preamble to the conversation before coming to the point, but you can sense it that they are just being nice. Some of them, however make you feel that even if you walked in limping and bleeding in front of them, their only question would be; So, what do you make of the stock market run these days, any tips?

Breed # 2: The penny stock holders

This is the guy whose interactions vary on how long he is holding that penny stock. If he has just gotten into that stock, he will drive you crazy with his bullishness on that stock. If he can have it his way, he would make sure you issue a buy report on it next morning or broke the stock to all your clients. He would actually prefer if you don’t wait for the morning and do something in the middle of the night, because the stock is just so damn hot.

Similarly, if it’s been some time since he has held that stock without the multi-bagger luck as yet BUT he remains optimistic that it will perform, it’s your moral obligation to tell him something good about the stock. Suggesting him to cut his losses and get out is just too inhuman. You have to have a heart and agree to his bullishness.

But if unfortunately the stock turns out to be a dog of a penny stock and the holder has already lost his hope, he transforms into guy#3 (see below)

Breed # 3: Those who think that the stock market is unfair

This is a breed that gets extinct in bull markets. But if you do find one, they are worth their weight in gold. Their once upon a time stories of losing their shirts and along it their belief that the market was fair, makes you realize how brutal corrections can be. Having said that the impact is not going to last beyond that conversation as you will walk away thinking either of two things: 1) this time it’s different or 2) I am not stupid like him. I will play it smartly and time my exit. You will rue those thoughts later, but that’s another topic altogether.

Breed # 4: Those who have nothing to do with the stock market

If you are lucky, this guy will talk to  you about something other than the market and you will finally feel that God exists and you are in an actual social gathering and not in a an extension of your work place. However if the bull market is really rampant and this guy regrets not getting onto it due to lack of interest, lack of risk appetite or because his father was Breed # 3, he will try to convince you that not investing in the stock market is a very well thought out decision (which can be painful as he talks about macro imbalances and what not)

Breed #5: The guy who knows the market better than you do

What do I say about Guy # 5? He has an air of arrogance around him and only two people can feel it. Him and you. Others around you might be oblivious but you can spot one in a crowd. Stand with him in a group and he will stay silent for most part, waiting to pounce at the right point and prove he knows more than you. Depending on your mood, you might find it funny or offensive but find such people you will, even if their bread and butter is running a tailor shop.

Key however is to beware the role reversal

You might hate Breed # 5 but what the heck, you play Breed # 5 to absolute perfection if someone is showing off his knowledge about stocks, don’t you? It’s just natural. We are just too proud of the profession we are in. But you know when we are really irritating. It’s when we turn into Breed # 1 once we see someone working for a company whose stock we have an interest in. We strike the normal pleasantries but our sole purpose is to know how the market response to their new product has been or how the organization is responding to change in management, the ONLY difference probably is that we are more desperate in BEAR markets, so in a way we still are unique, aren’t we?

Disclaimer: My only experience has been of an emerging/frontier market and the same might not be true for developed markets. In addition, this is my personal experience and written just for humour purposes. Just for Breed # 5 out there. I concede you can do it better than me, so please enlighten me!

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