Discipline and selectivity

Who do the most reasonable investors trust

When life experience accumulates behind them, and with it savings, everyone begins to think about preserving and increasing capital. To understand the topic of investment and risk management, we asked a few questions to the co-founder of the investment company Quantum Capital, Akhmet Byashimov, and its investment director, Aldiyar Seidali.

– How to form an optimal approach to investing?

– The range of investment instruments is very wide – from startups, private equity, small-cap companies to blue chips, bonds and passive indices. The key task is to determine the investor's goals, horizon and risk tolerance and choose the appropriate strategy and tools.

You should not treat the stock market as a way to make quick super profits. In our opinion, the optimal approach is to own shares of outstanding companies based on a thorough fundamental analysis. With a yield of 10-15% per annum in US dollars, taking into account regular deposits and compound interest, it is possible to multiply capital in the long term

– Tell us more about Quantum Capital's approach and results.

– Our strategies are based on professionalism, a balanced approach and discipline. Risk management is an essential component of the process – we always want to understand what risks we take and whether we receive the right compensation for them. It sounds simple, but this practice is often neglected when investing in high-risk, bubble-inflated assets.

Our approach has proved its worth based on historical results. For example, during the market turmoil in 2020, we managed to protect and even increase capital, and during the recovery period, our portfolio outperformed the market in terms of return.
Since then, we have managed to outperform the S&P 500 index on a quarterly basis. This cannot be called luck when betting on risky things – we earn exclusively on high-quality securities.

Investors need to understand that it is impossible to generate income without taking risks – it doesn't work any other way. Healthy market corrections of 3-5% are not only the norm, but also an opportunity to acquire desired assets at good discounts for long–term ownership

In addition to fundamental analysis, we use our special competitive advantage – investments based on machine learning. We use computing power to identify patterns in securities data, which allows us to predict the likelihood of their growth in the future. A simple analogy: having long-term data on temperature, precipitation, fertilizers used, and total yields for 10 different crop fields, you can model which of them are likely to have increased yields in the coming fall, and, for example, choose the two best fields. A similar approach to stocks is an additional source of return that improves portfolio diversification and provides a stream of interesting ideas. There are practically no alternatives to our product in Kazakhstan, and we plan to develop it further.

– How do you plan to develop in the future?

– The business model of Quantum Capital is based on the alignment of our interests with the interests of our clients. Our earnings depend solely on the growth of customer portfolios, we are not interested in increasing the turnover of transactions. The priority is to develop the company in the right way by expanding investment opportunities and expertise, as well as improving service and maintaining a long-term reputation.

The investment business is built on a team, because assets can be managed from any physical and legal location. The main thing is the strategy and the people who implement and develop it, which is why we always target the best people in the field of investment and data analysis.

At the same time, our clients are protected from possible business risks of the company, as we use segregated brokerage accounts that belong to clients and are located outside the company's balance sheet. Accounts are held in such major banks as JPMORGAN, Citibank, Barclays, and are guaranteed at the level of US legislation. We consider these to be important attributes, as asset security is a critical operational risk.

– In addition to asset management, what is your company's service?

– We develop a personal approach to clients: we not only manage investments, but also help them take the first steps to create accounts, fill out forms, and even provide tax support. By the way, we are currently in the process of developing a product that ensures tax efficiency within the framework of our residency in the AIFC.

It is important for us to be a source of investment training for clients. As part of regular communications, we provide not only detailed reports, but also reviews of market events, describe the results of strategies and the logic of their construction.

We work with clients from various fields, with different backgrounds and risk profiles, and the main task is to select the optimal strategy based on a personal approach and confidentiality.

– What is your current vision and expectations for the stock market?

– At the moment, stock markets are close to their peak values. But from the point of view of data on the global economy, in particular the United States, we do not see clear fundamental prerequisites for a large-scale correction before the end of the year. The corporate sector showed record profits last quarter, and the unemployment rate is declining, but there are some concerns about inflation expectations. Much will depend on the monetary policy of the Federal Reserve and further plans for fiscal support from the US government. We do not exclude an increase in volatility – the economic recovery is uneven and fragile, with high uncertainty in various sectors.

The widespread growth of the last year and a half should not mislead you – abnormal incomes are unlikely to be repeated in the near future. Unprecedented fiscal and monetary stimulus is gradually approaching the phase of reduction, so further expectations will have to be lowered. In this regard, a carefully balanced approach to investing does not lose its relevance, and high-risk assets should be treated with even greater caution.

There will always be attractive opportunities on the market. Selectivity and discipline remain the foundation of our strategies. Shares of companies that will not only survive the crisis periods, but also strengthen their market positions, should make up a large part of the investor's portfolio. However, this does not mean that some of the assets cannot be used for higher-octane ideas. This is also why we will use and develop investments through machine learning.