Ramez Merhi, director of asset management at Al Masah Capital Management
Based: Dubai
Years in industry: 8
What is the asset class and geography you are focused on?
My focus is on public equities in the Middle East and North Africa.
What is the outlook for the month ahead?
Research shows that it’s not possible to consistently predict what will happen in the short term, but thankfully to do well investing in stocks this is not a requirement. If one focuses on buying fractions of good businesses at attractive prices, over the long term you will do very well for yourself. Presently in the Mena markets there are companies at good valuations after the recent market sell-off.
What are the main risks, either upside or downside, to the outlook?
The price of oil is the main risk, as it is a significant contributor to government revenue in the Mena region. Significant changes to policy from Opec or larger members of the organisation from the Arabian Gulf will cause increased volatility in Mena markets. Volatility, however, is a friend to the patient investor, as it affords the opportunity to buy stocks cheaper than what would have been possible in a stable market.
What is the best investment at the moment?
The best investment depends on each individual’s financial circumstances and stage of life. An investor with a long-term investment horizon would be well advised to consider as part of their portfolio a diversified basket of stocks of fundamentally solid and attractively valued companies. Over long periods of time, the general trend of the stock market is upwards-sloping and is a great vehicle to compound one’s wealth over many years.
What was the best investment you were ever involved in?
The best investment I was involved in was the purchase of a deep value small-cap stock that was trading for less than its net-cash value. It was like being able to buy a dollar for 50 cents. The company was profitable and was growing and over the next 18 months, after purchasing, it went on to return five times the initial investment.
What was the worst?
The worst investment mistake is one of omission rather than commission. I missed an opportunity to buy a company that had been identified with great fundamentals trading at an attractive price, but for whatever reason I didn’t pull the trigger. The stock ran away from me and cost significant potential gains. Outstanding investment opportunities are few and far between, so when one presents itself it is well advised to not let it get away.
lgraves@thenational.ae
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