Farrukh Rasheed - FR

Writing #FRspeaks: how institutions outlive their founders, and how your savings outlive your salary. Systems over noise. Practitioner, not a guru.

[Farrukh Rasheed - FR @fr_farrukh]

𝗘𝗮𝗿𝗻𝗶𝗻𝗴𝘀 𝗴𝗿𝗲𝘄 𝗮𝗹𝗺𝗼𝘀𝘁 𝟱×. 𝗧𝗵𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗲𝗮𝗿𝗻𝗲𝗱 𝗷𝘂𝘀𝘁 𝟭𝟬% 𝗮 𝘆𝗲𝗮𝗿.

The Systems Limited example shows why identifying a good company is not enough.

𝗧𝗵𝗲 𝗽𝗿𝗶𝗰𝗲 𝘆𝗼𝘂 𝗽𝗮𝘆 𝗰𝗮𝗻 𝗱𝗲𝗰𝗶𝗱𝗲 𝗺𝗼𝘀𝘁 𝗼𝗳 𝘆𝗼𝘂𝗿 𝗿𝗲𝘁𝘂𝗿𝗻.

#FRspeaks #Investing #EquityValuation #PSX

[Farrukh Rasheed - FR @fr_farrukh]

Continuing yesterday’s learning session with my colleagues, we discussed what actually moves a share price.

Is the business earning more, or is the market simply paying a higher multiple for the same earnings?

Understanding the difference is where equity valuation begins.

#FRspeaks #EquityValuation #Investing #PSX

[Farrukh Rasheed - FR @fr_farrukh]

In this session with my colleagues, we discuss three fundamentals of investing:

Business quality.
Fair value.
Margin of safety.

A good business becomes a good investment only at the right price.

#FRspeaks #Investing #EquityValuation

[Farrukh Rasheed - FR @fr_farrukh]

An IPO may introduce a good company to the market.

But that does not automatically make it a good investment, particularly when strong earnings meet an excited market willing to pay a rich multiple.

In this video, I explain why an IPO may be one of the least attractive times to buy.

A good company can still be sold at a bad price.

#FRspeaks #BuiltToRetire #IPO #EquityValuation #Investing #PSX

[Farrukh Rasheed - FR @fr_farrukh]

Revenue growth tells you that a company is becoming bigger. Stable or improving margins tell you whether it is becoming stronger.

In Part 3 of Evaluating Equities, I discuss how profit margins can help us judge the sustainability of earnings and identify possible competitive advantage.

#FRspeaks #Investing #Equities #FundamentalAnalysis #PSX

[Farrukh Rasheed - FR @fr_farrukh]

A low P/E ratio does not always mean that a share is cheap. It may simply be based on one unusually good year.

In Part 2 of Evaluating Equities, I discuss why we should examine at least five years of results, remove one-time items and estimate a reasonable range for sustainable earnings and growth.

The question is not only what the company earned last year. The real question is what it can reasonably continue to earn.

#FRspeaks #Investing #Equities #FundamentalAnalysis #PSX

[Farrukh Rasheed - FR @fr_farrukh]

The KSE-100 has moved from around 41,000 to over 175,000 points. But does a higher index automatically mean an expensive market?

Not necessarily.

In Part 1 of Evaluating Equities, I explain the two drivers of share prices—earnings and the multiple investors are willing to pay—and why the index level alone tells us very little about valuation.

#FRspeaks #Investing #Equities #PSX

[Farrukh Rasheed - FR @fr_farrukh]

Knowing what to own is only half the investment decision.

The other half is knowing what price to pay.

This video introduces three concepts that will guide the next stage of our discussion: market price, fair value and margin of safety.

Because even the right asset can become a poor investment if you overpay for it.

#BuiltToRetire #Investing #FairValue #MarginOfSafety #FRspeaks

[Farrukh Rasheed - FR @fr_farrukh]

𝗜𝗳 𝗺𝘂𝗹𝘁𝗶𝗯𝗮𝗴𝗴𝗲𝗿𝘀 𝗰𝗼𝘂𝗹𝗱 𝗯𝗲 𝗳𝗼𝘂𝗻𝗱 𝘄𝗶𝘁𝗵 𝗼𝗻𝗲 𝗿𝗮𝘁𝗶𝗼, 𝘁𝗵𝗲 𝗿𝗮𝘁𝗶𝗼 𝘄𝗼𝘂𝗹𝗱 𝗵𝗮𝘃𝗲 𝘀𝘁𝗼𝗽𝗽𝗲𝗱 𝗳𝗶𝗻𝗱𝗶𝗻𝗴 𝘁𝗵𝗲𝗺 𝗹𝗼𝗻𝗴 𝗮𝗴𝗼.

Abdul Rehman Najam recently shared how he finds multibagger stocks.

His principle is sound. Given one company growing at 10% while earning 25% on its capital, and another growing at 30% while earning only 10%, he would prefer the first.

As a test of business quality, that makes sense.

Growth creates value only when the company earns an adequate return on the capital required to produce it. Otherwise, the business may grow larger without becoming more valuable.

But that does not make return on capital a method for finding multibaggers.

A ratio can help identify a good business. It cannot tell you whether that business is available at a price from which exceptional returns are still possible.

Consider three companies that comfortably pass a high-return-on-capital screen. Now place the ratio beside what their shareholders earned over five years, including dividends:

Nestlé Pakistan
Return on capital: 142%
Shareholder return: +46%

Pakistan Tobacco
Return on capital: 75%
Shareholder return: +25%

Mari Energies
Return on capital: 31%
Shareholder return: +413%

KSE-100 Index
Shareholder return: +278%

Returns include dividends, except Mari, shown on share price alone, so its figure is higher still.

The two businesses with the highest returns on capital delivered the lowest shareholder returns. Both substantially underperformed the index.

This does not prove that lower return on capital makes a better investment. Mari itself earns a healthy return on capital.

It proves something more relevant: the ratio that ranked these businesses by quality did not rank their investment returns in the same order.

Return on capital tells you what the company earns on the capital employed inside the business.

Your investment return depends on what you paid, what expectations were already built into that price, and what happened differently from those expectations.

Nestlé and Pakistan Tobacco were not hidden businesses. Their quality was visible to everyone, and priced accordingly.

The difficult part was never finding the ratio.

It was judging how durable the performance was, how much growth remained, what the market already expected, and whether the price left any room for those expectations to be wrong.

That is why I am uncomfortable with posts that present one ratio as a way to find multibaggers.

They make investing appear to be a screening exercise when the screen is only where the work begins.

Anyone can download a list of companies with high returns on capital. If that list were enough, judgement would have no value and investing would have been solved by Excel long ago.

𝗔 𝗿𝗮𝘁𝗶𝗼 𝗰𝗮𝗻 𝗱𝗲𝘀𝗰𝗿𝗶𝗯𝗲 𝗮 𝗴𝗼𝗼𝗱 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀.

𝗜𝘁 𝗰𝗮𝗻𝗻𝗼𝘁 𝘁𝗲𝗹𝗹 𝘆𝗼𝘂 𝘄𝗵𝗲𝘁𝗵𝗲𝗿 𝘁𝗵𝗲 𝗺𝗮𝗿𝗸𝗲𝘁 𝗵𝗮𝘀 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝗽𝗮𝗶𝗱 𝗳𝗼𝗿 𝗶𝘁.

#FRspeaks #BuiltToRetire #Investing #PakistanBusiness

[Farrukh Rasheed - FR @fr_farrukh]

My investment philosophy rests on three principles:

1. Build a diversified portfolio you can stay invested in.

2. Invest consistently and give compounding time.

3. Buy good assets at reasonable prices, not during a frenzy.

From tomorrow, we begin the next phase: how to evaluate different assets and determine a reasonable price.

#BuiltToRetire #FRspeaks #Investing #PersonalFinance #Pakistan

[Farrukh Rasheed - FR @fr_farrukh]

Most investors chase returns.

But wealth is built through three drivers: return, saving rate and time.

Two of them are largely within your control.

#FRspeaks #BuiltToRetire

[Mubariz Siddiqui @MubarizSiddiqui]

@aliktareen is being modest. The questions were the entire value of this one.

Funds, fees, taxes, brokers, IPOs, devaluation. If you have never bought a share in Pakistan, you will finish this knowing exactly where to start.

Appreciate @YousufMFarooq for breaking down complex ideas really well for us noobs.

Full episode here: https://t.co/trsHyH6rjt

[Farrukh Rasheed - FR @fr_farrukh]

می توانی منکرِ یزداں شدن
منکر از شأن نبی نتواں شدن

𝗬𝗼𝘂 𝗺𝗮𝘆 𝗱𝗲𝗻𝘆 𝗚𝗼𝗱, 𝗯𝘂𝘁 𝘆𝗼𝘂 𝗰𝗮𝗻𝗻𝗼𝘁 𝗱𝗲𝗻𝘆 𝘁𝗵𝗲 𝗴𝗿𝗲𝗮𝘁𝗻𝗲𝘀𝘀 𝗼𝗳 𝘁𝗵𝗲 𝗣𝗿𝗼𝗽𝗵𝗲𝘁 ﷺ.

His greatness owed nothing to wealth, position or force. It lived in how he treated people.

Truthful before anyone believed him.
Patient when he was wounded.
Merciful when revenge was his to take.
Humble while a nation looked to him.

His character did more than win people over. 𝗜𝘁 𝗺𝗮𝗱𝗲 𝘁𝗵𝗲𝗺 𝘄𝗮𝗻𝘁 𝘁𝗼 𝗯𝗲 𝗯𝗲𝘁𝘁𝗲𝗿 𝘁𝗵𝗮𝗻 𝘁𝗵𝗲𝘆 𝘄𝗲𝗿𝗲.

Fourteen centuries on, the world does not need louder declarations of love for him ﷺ. It needs to see that love in how we live.

In our honesty when deception would be easier.
In our forgiveness when we could strike back.
In our fairness when our own interest is at stake.

On this blessed day, the truest tribute is not to praise his character, but to hold our own beside it.

𝗟𝗼𝘃𝗲 𝗶𝘀 𝘀𝗽𝗼𝗸𝗲𝗻.
𝗙𝗮𝗶𝘁𝗵𝗳𝘂𝗹𝗻𝗲𝘀𝘀 𝗶𝘀 𝗹𝗶𝘃𝗲𝗱.

ﷺ

#FRspeaks

[Farrukh Rasheed - FR @fr_farrukh]

A retirement portfolio has two jobs.

It must pay for your lifestyle today and continue growing so that inflation does not reduce your purchasing power tomorrow.

A 10% investment return is not really 10% available to spend.

The return that matters is what remains 𝗮𝗳𝘁𝗲𝗿 𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻.

#BuiltToRetire #RetirementPlanning #FRspeaks

[Farrukh Rasheed - FR @fr_farrukh]

Most investors focus on how much they can earn.

They should also ask: How difficult will it be to recover when the portfolio falls?

The mathematics of loss may change how you think about capital preservation.

#FRspeaks #BuiltToRetire #Investing

[Farrukh Rasheed - FR @fr_farrukh]

𝗔𝗳𝘁𝗲𝗿 𝘁𝗵𝗲 𝗲𝘃𝗲𝗻𝘁, 𝗲𝘃𝗲𝗿𝘆𝗼𝗻𝗲 𝗰𝗮𝗻 𝗶𝗱𝗲𝗻𝘁𝗶𝗳𝘆 𝘁𝗵𝗲 𝘄𝗶𝗻𝗻𝗲𝗿.

Comparing an exceptional stock with an average property does not tell us which asset class is better.

The real question for anyone making such comparisons is simple:

𝗪𝗵𝗶𝗰𝗵 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝘄𝗶𝗹𝗹 𝗱𝗲𝗹𝗶𝘃𝗲𝗿 𝘁𝗵𝗮𝘁 𝗿𝗲𝘁𝘂𝗿𝗻 𝗳𝗿𝗼𝗺 𝘁𝗼𝗱𝗮𝘆 𝗼𝗻𝘄𝗮𝗿𝗱?

Hindsight can explain the past. It cannot select the next winner.

#BuiltToRetire #FRspeaks

[Farrukh Rasheed - FR @fr_farrukh]

An All-Weather Portfolio is not just about diversification.

It is about preparing for different economic environments without having to predict which one comes next.

Growth can rise or fall.
Inflation can rise or fall.

Each combination creates a different environment, and different assets respond differently.

In this video, I go a little deeper into the logic behind combining stocks, gold, dollar exposure and fixed income in one portfolio.

#FRspeaks

https://t.co/C5KsH7OMo3

[Farrukh Rasheed - FR @fr_farrukh]

Return matters. But the path to that return matters too.

A single-asset portfolio may deliver a higher long-term return. But if getting there means living through more than 50% drawdowns or years of stagnation, staying invested becomes much harder.

That is why I look at downside and volatility alongside return.

In this video, I explain why that trade-off makes an All-Weather Portfolio compelling for me.

#FRspeaks

[Farrukh Rasheed - FR @fr_farrukh]

Most investing mistakes start with two assumptions:

That we can predict what will go up next.
And that we will remain rational when markets fall.

Both are usually wrong.

In this video, I explain why an All-Weather Portfolio starts by accepting both limitations.

#FRspeaks

[Farrukh Rasheed - FR @fr_farrukh]

I have spent years investing, making mistakes, changing my mind, and learning what actually matters.

So I’m starting a short video series.

Each video will cover one idea, one lesson, and where useful, one practical recommendation. No long lectures. No market predictions dressed up as certainty.

I don’t sell investment courses, I’m not linked to any broker, and I have no commercial interest in what anyone buys or sells.

Just lessons from my own investing journey, shared simply.

One idea at a time.

#FRspeaks