Stock market is not a casino. Treat it like a business

Closing 2021 with the question Muzamil has been avoiding

The episode opens with Muzamil acknowledging the date. It is December 31, 2021. The new year is roughly two hours away. He has a goal for 2022 that he wants to declare on the record: he is going to start investing his savings. He is unsure where — stock market, mutual funds, possibly cryptocurrency — and so he has invited back the person he calls the show’s resident consultant on the subject, Laeeq Ahmad, for his third appearance.

Laeeq notes that only one other guest has come on the show more than twice, and jokes that this might be the only podcast in Pakistan where guests are willing to keep returning. The opening exchange sets a tone that will run through the conversation: this is not a hype interview about quick gains. It is a careful walk through how a working investor actually built a position.

Before the substance begins, Laeeq makes a point that he wants the audience to hear directly. “In Pakistan, information-based and value-based discussion barely happens,” he tells Muzamil. “What you have started, very few people in Pakistan are able to do.” He encourages listeners who are getting value from the show to support it, and notes that he himself has taken inputs from Thought Behind Things into the platform he is building.

The Teradata decade, and why he never applied for a job

Muzamil pivots into something he has not done in Laeeq’s previous appearances: the personal arc. Laeeq is 38. His early education was in Abbottabad, his FSc in Muzaffarabad, and his undergraduate degree from NUST in 2005, followed by a BIT in computer science.

What is striking, looking back, is that of the first BIT batch at NUST, roughly thirty to forty percent went directly to Teradata. The second batch sent almost everyone. Laeeq did not get in on the first attempt — the field had become more competitive, FAST and NUST were both feeding it, and only a handful of people from his batch were taken. He started with basic software engineering, moved into mobile development as that wave hit in 2006 and 2007, and finally joined Teradata’s Global Delivery Center in 2008 in managed services.

He stayed for nearly a decade. The salaries, he is candid, were not great. What compensated was the experience. “International travel, the kind of hotels we got to stay in — Edinburgh, a five-star hotel for six months, not for one night — and then you fly back for two weeks of rest before going out again. In ten years, I never applied for a single job.”

By 2017, structural changes at Teradata created what he describes as a kind of insecurity from the top down. He applied for Australian PR and was granted it. He had also, years earlier, missed UK indefinite leave to remain by six months because of how Teradata had rotated him between regions. By October 2017 he had resigned, intending to leave for Australia.

He did not leave. His wife was expecting twins. The family decided not to take the risk. He pulled his Teradata resignation back temporarily to finish a complex project he had been leading from scratch — a three-person team that built and deployed an open-source-based system at massive scale across three different geographies. That project changed his mind about leaving Pakistan at all.

ABC Data, the physical-business detour, and a 90% loss

“By the time I finished that project,” he tells Muzamil, “I thought — there are so many opportunities in Pakistan in this space. Why not start my own company?” He resigned formally from Teradata in October 2018 after honouring a project extension, and incorporated ABC Data in February 2018, an analytics consultancy.

The company found customers quickly. He did not need to deploy his Teradata exit capital — about 2.5 million rupees — into the business itself. Looking for a place to put that money, he made what he now considers his single most expensive mistake. He believed that the stock market was not the right place to be invested. He put the capital into a physical business that someone else ran on his behalf.

What followed was a real-time tutorial in macroeconomics. As inflation rose and the government began tightening, the physical business cratered. “From January 2018 to November 2018, that was the period we were invested. We booked a ninety percent loss and shut the business down.” He does not call it a loss in the conventional sense. He calls it the price of an education he could not have bought any other way. He had learned, viscerally, what monetary tightening does to retail-facing physical businesses — and what it does not do to equities that are positioned correctly.

The Avanceon trade — and how it bought a car, then funded a platform

The trade Laeeq walks through next is the centrepiece of the episode, and worth following carefully because the lesson is not the percentage return.

He had been buying and selling Avanceon, a Pakistani industrial-automation company with international customers including Nestlé, Aramco, and the Dubai Metro, since 2017. His average cost was around thirty-four rupees. In October and November of 2019, he needed a car. He could have paid cash. Instead, he made what he calls an educated bet: he put twenty percent down, leased the rest, and kept his Avanceon position intact as a liquid, appreciating asset. The logic was that bank financing would cost him nineteen to twenty percent in interest; a high-conviction equity holding could outpace that and remain liquid if he needed cash for ABC Data.

Then COVID hit. By the third week of March 2020, Avanceon was trading at 23 rupees, then 21.6, then 17.6. “I was sitting in a depressed environment, the news was depressing, the roads were empty, everyone was saying liquidate, hold cash,” he tells Muzamil. “But I thought — this same company that I bought for 105,000 rupees two weeks ago, I’m now getting at a sixty-five percent discount.” He bought another five thousand shares at 21.6. He bought another five thousand at 17.6. He was waiting for sixteen. It never came. By April it had reversed to 22, then 27, then within three months it was trading near fifty.

The peak he describes is more striking. Avanceon traded as high as 145 rupees. At that price, if he had liquidated everything, he could have bought five or six cars in cash. He did not. He sold in tranches — at sixty, at eighty-five, at one-fifteen, at one-thirty — and used each tranche to fund a specific capital requirement at Sarmaaya, the platform he was building. “A lot of people ask me, sir, how is the data on Sarmaaya free, how are you funding all this? These were the sources from which I generated the funding.”

He still holds roughly forty-five percent of the position. The thesis has now changed: Avanceon’s subsidiary Octopus, an industrial IoT and cloud-dashboarding company with patents and an Azure contract, IPO’d to twenty-seven-times oversubscription. Avanceon owns eighty percent of Octopus’s earnings. The reason to keep holding is no longer the original reason.

Systems Limited, and the figure that broke him

The second case study Laeeq offers, against his own past behaviour, is Systems Limited. He bought it at 112 rupees and sold the full position at 139 — a twenty-five percent return in six weeks. “Do you know where Systems is trading today?” he asks Muzamil. “Seven-seventy.”

What changed his thinking was a corporate briefing. Pre-COVID, Systems had eight hundred employees globally. By August or September 2020, that number was past four thousand. The company disclosed its revenue per employee: twenty-seven thousand US dollars a year. Multiply it out and the picture is a company that, in his words, is starting to look like the next Wipro of Pakistan. “Quality stock, quality company, earnings strong, everything top-tier. Every fund manager I checked was invested in it.”

The lesson he extracts is the one he keeps returning to. “Our biggest problem is that we don’t think of the stock market as a venture, as a business. We think — bought at ten, sold at twelve, ran away. That is not investing."

"We don’t consider stock market as a business”

Muzamil presses on the practical question. He is, by his own estimate, looking at putting roughly 150,000 rupees a month aside. Where does that money go?

Laeeq’s answer is unambiguous and contains the line that holds the rest of the conversation together. He does not recommend that Muzamil, or any beginner, put 150,000 rupees a month directly into individual stocks. “It is too risky for you to invest in that particular market when you don’t know it.” The right place to start, he says, is mutual funds — and within mutual funds, the allocation should track the macro environment. When interest rates are rising, weight should sit in low-risk and medium-risk funds rather than high-risk equity funds.

The reason he prefers mutual funds for beginners is not that returns are higher. The reason is education. “Fund managers are the smart money. Watching what they hold, what they enter, what they exit — that itself is an insight.” He references an earlier episode of the show with another fund manager and tells Muzamil that the guest had explained it correctly: this is how an investor without a research desk borrows the work of people who have one.

The case he makes against retail going it alone is grounded in something he had read in the news that morning: a billion-rupee fraud where small investors had been pulled in by a Telegram channel promising a fixed return on an unbranded scheme. “I don’t understand where these people come from,” he says. “On my platform there are companies giving twenty-five to thirty percent in dividends alone, and people are sending forty thousand dollars to a Telegram group.”

The Unilever number, and what twenty years actually does

The number Laeeq uses to close the case for patience is the one Muzamil keeps reacting to. Sarmaaya, Laeeq’s platform, runs a systematic-investment-plan simulator. For any listed company, it shows what would have happened if you had invested a thousand rupees every month for the last twenty years.

For Unilever Foods, the cumulative investment over those twenty years totals around 233,000 rupees. Muzamil guesses the return: twelve lakh, maybe fifteen lakh. Laeeq tells him the actual figure. “Two crore seventy-five lakh.”

He pushes the point further. He mentions a friend whose grandfather, in the 1970s, bought physical share certificates the way people used to — when the prices were called out on PTV before the evening news. The shares are still in the family. The friend’s instruction is to do nothing with them. “Imagine if they had a thousand shares from the 1970s,” Laeeq says. “What would the worth of that be today? It is exponential. The business needs time to deliver. We strangle it before it can.”

Reading the macro, then reading the company

Muzamil offers his own reflection at this point, and it is the closest the episode gets to a thesis from the host. He explains that he deliberately did not enter the market in 2021 because he wanted to understand the macro first, not the basics. He wants to understand the direction of the economy — what an autonomous State Bank means, what a forced IMF programme implies for the rupee, why an import-based business is a stock he would not want to hold for the next ten years, why an IT business with dollar-denominated inflows is structurally protected as the rupee weakens.

Laeeq does not disagree. He extends the point. The two trainings he has built on Sarmaaya are designed to address exactly the two layers Muzamil is describing. The first is a fifteen-week capital-markets fundamentals course built with a practitioner he names Amar, focused on macroeconomics and how government tweaks at the policy level rewire the case for individual sectors. The second is a technical-analysis programme built with a practitioner named Karan Das, which he calls — half-joking, half-serious — a course in consumer psychology, because that is what technical analysis ultimately reads.

He is careful to flag what they are not. They are not theoretical. They culminate in a demo-account competition where participants trade a notional ten thousand dollars under live conditions. “Things look very easy when you read them,” he says. “In a real pressure environment, with real numbers, your actual analysis starts to apply. Some people perform very well. Some people realise something is still slipping.”

What he wants Sarmaaya to become

By the end of the conversation, Laeeq is describing the platform itself in terms that double as his answer to Muzamil’s original question. Sarmaaya is being redesigned — a full UI and UX rebuild — specifically to make the information accessible to a layperson. “If someone wants to understand, wants to invest in a particular company or a particular fund, we should make the information so easy that they can start investing themselves.”

He returns one final time to what he calls the only real distinction between an investor who compounds and one who does not. “It is a zero-sum game. When I bought Avanceon at 17.6, someone was selling it in panic. When someone sold at 145, someone bought it. The only thing that can distinguish you from others is on what basis of education you are making the decision. That is what matters.”

It is a calm note to end the year on, and it lands the way Muzamil clearly wanted it to land. The new year is now less than two hours away. He has the answer he came in for. The conversation closes with the implicit agreement that Laeeq’s fourth appearance, whenever it happens, will not be a check-in. It will be a progress report.