I am Furqan Punjani and I have been a retail investor and a financial analyst for 15 years now! My only goal right now is to help SIMPLE RETAIL INVESTORS make money from the stock market. This newsletter and this free stock market course, are to help investors become better investors.

Paid community launched. Links below.

Our website has everything we have done so far!

Announcement: Daily Quizzes!

I am starting daily quizzes about sectors and stocks. It will be a very short and simple email with one or two questions and the next day I will answer them. The idea is to ask the right questions about stocks and sectors so that you can first understand them and then invest in them.

This starts today! Sector: Oil and Gas

Topic: What’s up with the dollar?

The dollar at the interbank market at Rs295 today! In the open market, it has come down from Rs335 to Rs300 right now. Honestly, this is awesome!

But I am not an economist, I am an investor! So let me show you my thinking process.

Important questions that I have in my mind right now:

• What will happen to inflation now?

• What will happen to the expectation of interest rates now?

• Which sectors should benefit? And which sectors shouldn't?

I believe, If I could find the answers to these, I would be ahead of the curve.

Thinking like an investor!

1. Inflation: The culprit to rampant inflation in Pakistan is the ever-losing rupee value against the dollar. Electricity, Gas, Petrol, and even food prices go up when the rupee depreciates.

So if the rupee just maintains its current value, the expectation of inflation will die. From 25-30% expected in the next few months, people will start to talk about 15-20%!

See what happened in Sri Lanka! Their inflation fell down from 60-70% to 4%!!!

Followed by…

2. Interest Rates: High inflation = high interest rates, and low inflation = low interest rates!

If the rate of inflation falls, what do you think will happen to the interest rates? In the last monetary policy announcement SBP has already indicated this trend!

The market will soon start to expect that interest rate hikes will stop and later people will start to expect them to fall! Awesome no?

3. Sector: Anyone who uses/imports raw materials in dollars will benefit. For example, companies that use RLNG, parts, core raw materials, etc.

However, companies that benefit from rupee depreciation will lose out unless they have consistent growth in their dollar revenues. Now think, which companies were analysts pushing on the back of rupee depreciation? Uska Ulta!

But all this will require that the dollar stays at this rate! If this is temporary, we might not see all this.

All in all - this can be a huge change, happening right in front of our eyes! So keep a close eye on the dollar, especially the interbank rate!

New in the paid community:

The Dollar and What Now?

I will be making a detailed video on everything we discussed above along with my understanding of specific sectors and companies.

See I feel, that if there is a major change happening, every savvy investor should follow it. I have an angle that can determine the returns you make in the next few years!

Do check out the intro video, if you haven’t yet!

Last week I spent my free time on:

Listening to a Podcast

The podcaster sat down with Mr. Aswath Damodaran ( the Dean of Valuation) to talk about investing and valuation. If you are like me, you will awesome value from it.

01:42 - Whether recent technological advances should lead us to think about investing. differently than in years past.

03:23 - The role intangible assets play in valuation.

07:08 - How he determines which companies he wants to dive in and research.

14:40 - How Aswath think about setting an appropriate discount rate in valuation.

20:49 - His thoughts on whether investors should deem the US treasury rate as the risk-free rate available to investors.

24:10 - The future expected return of the S&P 500 implied by the market as of August 2023.

27:29 - How Aswath thinks about the risks of investing in China.

30:02 - Aswath’s updated views on the valuation of Nvidia & Meta.

33:21 - The potential dangers of a buy-and-hold approach.

47:31 - How to think about using adjusted EBITDA in stock analysis.

49:44 - How Aswath thinks of the macro.

57:16 - Why Aswath recommends a strong understanding of statistics to invest well.