Abdul Rehman Najam

Early life and background

Najam grew up in Karachi in a joint family. His family was in the steel industry. The family business grew into several factories, and each was handed to a son. He is the youngest in his family. [2]

Education

Najam got good results in his O Level and A Level exams. He went to the University of Warwick in 2012. [2]

Career

In 2015, when he came back, Najam looked at Pakistan's stock market and found its long-term returns very good. He read investing books, including Security Analysis and The Intelligent Investor. He also watched Berkshire Hathaway's annual meetings on YouTube. He began attending companies' corporate briefings to understand their businesses. [2]

Najam adapted the investing principles he had learned to the Pakistan market. He described 2019 to 2022 as the third phase of his ten years of learning, in which he understood the importance of practical investing. In 2022 he began writing about the economy and businesses for the first time. He said a community of 25,000 formed within two years and gave good feedback. His team wrote down its investing framework during this period. [2]

ARN Financial Advisors

ARN Financial Advisors has been described as one of the largest financial advisories for investments in Pakistan. The firm runs an investing masterclass and advises people on their portfolios, and it manages one-to-one portfolios for clients. Najam says the firm aims to guide people to invest in a scam-free way and to invest in Pakistan's top businesses. He said most such scams run through crypto and similar products. [1][2]

Najam says the firm launched its advisory services in July 2024. The investing masterclass launched in August 2024 with its first batch. He says the advisory services have more than 300 members, or around 1,000 including the masterclass. He also says the company has reached almost 1,000 people. [2]

The firm holds monthly calls that last four to five hours. When a company joins the model portfolio, the firm sends a five to ten minute voice note explaining why. Within two to three weeks, the firm uploads a 30 to 40 minute video on the company. Najam says the firm has made detailed videos on 10 to 15 companies. He says the firm answers members' weekly questions through voice notes, which it calls collective wisdom. [2]

Najam says the firm provides recorded course material for members. He says clients who have been with the firm for about nine to ten months invest, on average, over 40% of their savings. He says the firm's first clients included several of Pakistan's top business owners. He says the firm does not issue daily buy and sell signals. [2]

Investment philosophy

Najam follows Warren Buffett's principle of investing only in what you fully understand. He says the first investing step is fully understanding each company's back-end business, and the second is judging the level of undervaluation. He says investors should judge each company's long-term ability to make profit and should act only when the key factors of a company change. He compares researching the stock market to journalism and calls the stock market a puzzle. He said he always tells people that Ray Dalio has written a very strong book. [2]

Najam says the firm's investing framework has a third pillar, which he calls the concept of best investment. He says politics is the fourth pillar of his market framework. He says his team's formula, 20 minus the interest rate, fits Pakistan's market well. He says the average return in Pakistan's boom cycles is 30 to 35%. [2]

Najam says an advisor's job is analysis and best advice, not guarantees. He says the firm avoided telling clients that a 70% one-year return would repeat. He says trading carries about a 90% chance of loss, while he thinks about 90% of people can do long-term investing. He describes technical analysis as a battle with other market participants and says investing is ultimately a game of conviction. [2]

Views on Pakistan's markets and economy

Najam says the reality of Pakistan's stock market is good, but its public story is poor. He says Pakistan's index was about 1,000 on 1 January 1999 and is about 125,000 now. He says the Pakistan stock market has returned about 125 times over the period he compared, against about 50 times for the US stock market since 1 January 1999. He estimates Pakistan's average GDP growth over 25 years was about 4% or less. [2]

Najam cites Meezan Bank as a stock that gave strong returns over the past 10 years. He cited a petroleum company, since renamed an energy company, as having a very good long-term return. He says the reality of real estate returns is poor, though its story is appealing. [2]

Najam says Pakistani firms have had good past returns but rarely communicated with investors. He says that until three or four years ago, brokerage houses were the only advisors in Pakistan. He says financial influencers and advisors play a large role where investing adoption is high. He estimates that about 350,000 accounts are open directly with brokerage houses in Pakistan. He argues that the value someone creates through services can be 100 times their own portfolio. [2]

Najam says he is very bullish on Pakistan for 2050 and 2055. He names a young population as one of Pakistan's two main strengths. He says no major structural reform has happened in Pakistan in the past 25 years. He argues that part of Pakistan's economic growth problem is that people do not invest. [2]

Views on crypto

Najam says crypto has no inherent value creation and no productivity. He argues that crypto is harder to understand than stocks. He argues that if Bitcoin becomes digital gold, its return over 25 years could not exceed about 25 times. He says commercial Bitcoin mining is not viable in Pakistan. [2]

Views on the oil shock and Pakistan's economy

Najam said he had spent recent weeks studying the oil shock. He said he believes the worst has already been priced in for the Pakistan Stock Exchange. He said there have been only three instances in the last 40 years where crude oil rose by more than 100% within two months because of a war. He named the Iraq-Kuwait war of 1990, the 2003 Iraq and US war, and the Russia-Ukraine war of 2022 as those three cases. He said his team had made a video on the index and the macro and would make one on individual sectors the following week. [1]

Najam said crude stayed at a very high price for at most six months in all three cases. He said the Pakistan Stock Exchange index hit its low within 25 days of the event in all three cases. He said markets are forward looking, which he called one of the pillars of financial markets. He said the one past case with a prolonged oil subsidy turned the shock into macroeconomic instability. He said he researched the 1990 oil shock. [1]

Najam said that when Pakistan set diesel at 520 rupees, the international price including everything was around $260 a barrel. He said around 30 to 35% of crude oil is used as diesel worldwide, and that diesel usually trades around $30 to $40 a barrel above crude oil. He said demand destruction above $120 crude acts as an automatic stabilizer in the oil market. He said petrol used to cost about 9 rupees per liter and rose to 23 as crude oil rose from about $15 to $35, and that inflation was around 7% and rose to 14 to 15% when the oil price more than doubled. [1]

Najam said the State Bank did not cut rates almost a year earlier, when inflation was 3 to 4%. He said the latest T-bill and PIB auctions point to rates near 12%. He said the level of escalation cannot continue for much longer, though some wars have lasted 10 to 20 years and escalation has to come down. [1]

Najam said Pakistan would have no major devaluation unless its reserves fall below $10 billion, and that Pakistan tends to devalue only when it has no other option. He said he cannot recall a devaluation in the last 30 years when reserves were below two months of import cover. He said reserves would still be about 2.5 months of import cover after the Eurobond repayment, even without new funding. He said devaluation is more than 50% likely if reserves reach around $10 billion. He said that instead of devaluing, Pakistan brought down the open-market rate. [1]

Najam said the UAE dirham and the hawala rate both traded around 77 rupees recently. He said actual remittance inflows have increased during the conflict, and that in COVID informal remittance channels moved to formal ones and the currency appreciated. He said the real remittance impact is likely to play out over three to nine months. He said Pakistan has good relations with Saudi Arabia and plays a major role for its economy and security. He said the biggest indicator of foreign reserves is the relationship with the IMF, and that an IMF staff-level agreement came while Pakistan was giving an oil subsidy. [1]

Najam said 70 to 75% of the diesel Pakistan uses is refined locally, and that Pakistan now imports crude at about $150 a barrel and refines it locally, instead of importing diesel at $250. He said refinery profits would rise a lot, making refineries a beneficiary of the conflict, and that all refineries except one are listed on the Pakistan Stock Exchange. He advocated capping the diesel refining margin at around $60 to $70 during the wartime period, and suggested reducing or capping diesel margins for two to three months. He said refinery profits would rise more than exploration profits if escalation continues. He said demand contracts with the pump price, not with the amount of tax collected. [1]

Najam said the urea bag price will rise by 200 to 300 rupees because of diesel-driven transport costs. He described an unwritten contract: fertilizer makers get gas at a set price and raise bag prices only on cost increases. He said global urea is around $900 a ton, while Pakistan's price converts to about $350 a ton, and that Pakistan is one of the largest urea users in the world, at around 6.5 million tons. [1]

Najam said Fauji Fertilizer and two other fertilizer companies are not affected by the conflict. He said fertilizer companies get fixed-price gas, so their supply is secure. He said fertilizer companies pay out their earnings as dividends because no new gas is allocated for new plants. [1]

Najam said price controls on wheat and sugar have reduced productivity, while deregulated corn has been a success. He said pricing, regulation and politics, including votes from farmers, are a big inefficiency in agriculture. He said urea is the star fertilizer and DAP use is lower than it should be. He said a urea price shock could lead to black marketing and hurt food security. He suggested raising urea toward international prices, with targeted subsidies for small farms. [1]

Najam said food prices should be deregulated. He said he is not a proponent of exporting urea, because that means exporting gas. He said the best case is to run all fertilizer plants, especially urea, with the gas available. [1]

Najam said Pakistan's gas power plants are not working, so coal and furnace oil plants are used instead. He said the coal price has not yet had a shock, but a rise would hit the current account. He said many APIs used in medicines are linked to oil prices. He said EVs could cut oil imports and free up room for capacity payments. He said about 5 million barrels of Saudi oil is now exported through the Red Sea. [1]

Najam says sustained oil prices above 80 would make things hard for Pakistan. He thinks oil prices are most likely to stay between 60 and 65. He says Pakistan faces low political risk from the Iran and Israel conflict. [2]

Najam said that if escalation continues he would favour fertilizer stocks, banks and refineries bought at good prices. He said that if escalation continues he would also look at cement and automobile companies priced very low. He said that with de-escalation he would favour stocks that have fallen sharply. He said the Pakistan Stock Exchange (PSX) index heavyweights are oil and gas exploration, banks and fertilizer companies. [1]

Najam said there is a saying that pessimists sound smart, but optimists make money. He said following the news for a month does not make someone a forecaster. He said his research indicates the bottom is in, though volatility will continue. He advised investing a fixed amount in good companies and reviewing it after six months. He advised against selling when the market is down and buying back when it is up. [1]

Najam advised doubling down on public transport, which he said would solve many of Pakistan's problems. He suggested making transport free for now and possibly recovering half the cost later. He suggested public transport run from about 7:00 a.m. to 11:00 p.m. He said Pakistan has around 30 to 35 million motorbikes, and that shops in Pakistan often stay open until 2:00 or 3:00 a.m. [1]

Timeline

2012

Went to the University of Warwick.[2]

2015

Looked at Pakistan's stock market and found its long-term returns very good.[2]

2019

Began what he described as the third phase of his ten years of learning, which ran to 2022 and taught him the importance of practical investing.[2]

2022

Began writing about the economy and businesses for the first time.[2]

2024

ARN launched its advisory services in July and its investing masterclass in August.[2]

Appearances

Frequently asked questions

References

1. Pessimists sound smart, optimists make money . Thought Behind Things , 2026-04-07.
2. Why Pakistan's stock market is the wealth engine no one trusts . Thought Behind Things , 2025-06-20.