Zaheer Anwari – Earning 30% per year with TA.
My next guest was a software engineer that originally tried day trading, then moved on to value investing, and then eventually moved on to trend following by using TA (technical analysis). In this episode, we talk about his company, his strategy, and even dive into 3 stocks that have generated impressive returns over the last 5 years. Please welcome Zaheer Anwari.
Payback Time Podcast
A Podcast on Financial Independence. Hosted by Sean Tepper. If you want to learn how to escape the rat race, create passive income, or achieve financial freedom, you came to the right place.
- (00:42) – Show intro and background history
- (01:37) – Deeper into his background history and business model
- (03:38) – His transition from day trading to value investing
- (07:32) – Deeper into his investing strategies
- (13:48) – Understanding his courses business model
- (17:56) – How he charge for that educational models
- (18:21) – A bit about his numbers
- (18:53) – Deeper into his business model and strategies
- (23:50) – How the company is structured
- (25:22) – In what companies are his investments focused
- (26:46) – What type of certifications does his company have
- (27:34) – Deeper into his returns and some stocks he holds
- (40:04) – What is the worst advice he ever received
- (41:26) – What is the best advice he ever received
- (43:33) – Guest contacts
[00:00:04.500] – Intro
Hey, this is Sean Tepper, the host of Payback Time, an approachable and transparent podcast on financial independence. I’d like to bring on guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go. My next guest was a software engineer that originally tried day trading, then moved on to value investing, and then eventually moved on to trend following by using technical analysis. In this episode, we talk about his company, his strategy, and even dive into three stocks that have generated impressive returns over the last five years. Please welcome Zaheer Anwarri.
[00:00:43.100] – Sean
Zaheer, how are you doing?
[00:00:44.540] – Zaheer
I’m great, thank you. How are You doing?
[00:00:45.380] – Sean
Good. Thanks for joining me. So why don’t you kick us off and tell us about your background?
[00:00:50.890] – Zaheer
Yeah, sure. So I guess just a normal background. I think one of the first things I like to share with people is that I’ve never worked in the city. I’ve never worked for an institution or a hedge fund. I have a degree in software engineering, which I believe we have something in common in terms of that software engineering background. And it’s really when I started earning money in my 20s, started saving a lot of money. I always had this desire to save money from a very early age. So from the mid 20s onwards, that’s when I built up a bit of capital behind me. And I got the curiosity bug, what’s all this investing about? And I think really 26, 27, that’s when I started diving into the world of first day trading, then value investing, but ultimately what I do now, which is trend following.
[00:01:36.510] – Sean
Got it. Okay, let’s just back up a little bit because I always like to know timelines. And when you transition to doing this full-time, how long have you had your business?
[00:01:45.940] – Zaheer
Yes, a good question. So when you say my business, are you talking specifically about Sub blindT rading. Com? Correct. Yeah. Okay, so it’s a good question. So I started investing for myself around 27, 28. And by the time I was in my early 30s, that’s when I’d made enough money to start scaling back on the full-time work that I was doing. And that’s when I started mentoring. I was part of a couple of other communities initially where I was learning the trade in terms of building the ability to train people. And it was in 2018 that I set up Subblime Trading. Went off of my own, my co founder, Kala. We’d known each other for about 10 years at this point. We met in another trading community. I approached him and I said, look, you’ve got a set of skills, I’ve got a set of skills. We can do a better job than what is out there at the moment. Let’s start our own academy. And that’s how SubblimeT rading. I came about in January 2018.
[00:02:46.030] – Sean
Got you. And why don’t you tell us a little bit about the model? It’s very educational focused with courses. Do you do coaching, anything like that?
[00:02:53.650] – Zaheer
Yeah, absolutely. So it’s based on a subscription model. So we have our starter course, which is called the Thunderbird. And then we’ve got our main course, our flagship course, if you like, which is called the Phoenix. And they’re both just subscription models. So in an ideal world, I wouldn’t really have the Thunderbird. I’d like to just be able to focus on the Phoenix. But as you know, we’re in a world where trust is a big part of the process. A lot of people have spent a lot of money on courses, lost a lot of money. And ultimately, by the time they find us, they are generally thousands of pounds down based on decisions that they’ve made in the past. So the Thunderbird comes in really nice as it’s a nice cheap starter course. Once the trust is there, then they tend to transition to the Phoenix, which is really where the magic happens.
[00:03:38.600] – Sean
Got it. Okay, let’s talk about real quick here because we’ll tie back to the Thunderbird and Phoenix here in a second. But you went from day trading, then to value investing, then to trend following. Tykr, we’re really focused on value investing long term, buying safe businesses and really buying more, but really holding and buying more month over month, year over year. Why did you make the transition to trend following? Were you finding bigger returns? Is that why you made the transition?
[00:04:11.570] – Zaheer
Yes, basically yes. Long and short of it is correct. So day trading, I would just advise everyone to just really be careful with day trading. It’s advertised as this sexy way to quick riches. You will end up finding out that it’s a dark hole to losses. So you really want to try and avoid trading. And I learned that really quickly. A lot of people tend to find that out 5, 10 years down the line when they’ve lost a lot of money. And I’ve actually seen it go really, really, really bad. So be really careful with day trading. I really encourage people to be smart about their choices. One thing I’m good at is just making quick decisions. It’s maybe a little bit impulsive at times, but if it doesn’t work for me within a set period of time, I’m out. So I learned day trading wasn’t the way forward for me. Plus also I was working. I was working two or three jobs simultaneously. So the time element wasn’t there. I didn’t want to be glued to a screen all the time. So day trading didn’t sit well for me. Value investing was interesting because I started reading about people like Warren Buffett, of course, he’s the God of value investing.
[00:05:14.540] – Zaheer
Again, I just didn’t have the time to do the research. I found it quite time consuming for me personally. I was working sometimes 15, 16 hours a day, seven days a week. I had two jobs, three jobs, earning a lot of money, just not enough time. Hence partly why I started looking at investing as well, because I thought, how am I going to find that balance? Money is coming through. I haven’t got the time. I need to find a balance. The moment where it all changed for me was when I read Weight of the Turtle by Kurtis Faith. That was just eye opening because it’s a process where you use technical analysis and charts like a trader, but you hold your positions like an investor. And that’s what made a lot of sense to me because technical analysis is pretty straightforward. It’s just looking at charts and determining whether an asset asset is high probability or not. That’s technical analysis. You can do that on the lower time frames where day trading comes in, but it’s all over the place. When you look at the monthly, weekly and daily, you’re looking at the bigger picture.
[00:06:10.740] – Zaheer
So you’re looking at it from an investing mindset. Then typically I hold positions for 12 to 18 months. So there’s still that investing element to it. And then 12 to 18 months is where trends start coming to an end. Trends start moving from one sector to another sector. So rebalancing the portfolio will come in few after around 12 to 18 months. And that sat really well for me initially because what I understood is I can prepare at the weekend, take an hour or two, do my scanning, look for opportunities, Monday to Friday, manage my portfolio, which would take a few minutes a day. It just sat really well for me well with the lifestyle that I had. And so trend following was just it was perfect for me for the lifestyle I had at the time.
[00:06:50.840] – Sean
Sure. So you actually were able to devote more time to trend following than value investing. Is that correct?
[00:06:59.050] – Zaheer
Yeah. For me, I think that’s what I just found easier. Maybe at that time, I wasn’t too aware of how to do value investing correctly. Maybe that was part of the process, learning all the numbers, the PE ratios, looking at this, looking at that. Whereas looking at the charts, again, maybe because I’m a visual person as well, I like to look at candlesticks. I like to physically see what the price of an asset is doing. That resonated with me really well. And so I think I naturally gravitated towards trend following.
[00:07:31.950] – Sean
Got you. Our audience loves to dive into tactical strategies they can take away today. What I’d like to do is let’s dive into what are the trends you look for and have found to be successful.
[00:07:46.260] – Zaheer
Fantastic. So can I break down my process, top down? Please. Yeah. Okay. So the first step that I do is I scan the market. So this requires good scanners. Now, there are free scanners out there that you can start with and play around with. But as you get more serious into it, you need the right tools for the trade, just like any career choice. If you want to deliver for your clients, you’ve got to have the right tools just to put some context into that. One of the jobs that I was doing in my 20s was advertising photography. And we had clients like Coca Cola, Audi, Whirlpool. Our images were on the side of busses. And so we needed a camera that would allow for those giant images. So we had a Hasselblad. I don’t know if people are familiar with Hasselblad. But Hasselblad, they’re the godfathers of cameras. People tend to think it’s NICON or Canon. It isn’t. It’s Hasselblad. Hasselblad were the first cameras to go to the moon. And the camera that we used in the studio was 60,000 pounds. So around probably $70,000. It’s not a cheap camera, but we needed to invest in that to be able to take the images so we could get repeat clients and so on and so forth.
[00:08:51.840] – Zaheer
So scanners, I view scanners in the same way. Scanners aren’t cheap. I pay several hundred pounds a month for my scanners, but because I pay for the scanners, it allows me to do a deep dive into the sectors, and then I find the strongest stocks in the most robust sectors. So that’s the first step. So through that scanning process, I could go from, say, 15 to 20,000 stocks to maybe 300, 400 stocks that meet a particular criteria that I’m looking for. I then take those 3,000 to 400 stocks and I put them through a second screening stage, which is where technical analysis and the charts come in. So I’ll manually go through 3,000, 400 stocks and based on the charts, I will pick out the 5,000 to 10 stocks that will eventually make it into my portfolio. And I do that process at the weekend. Now I have it down to maybe one or two hours. And because I’ve done that, Monday to Friday, I manage my portfolio.
[00:09:44.880] – Sean
Got it. So your time investment per week is about one to two hours, you would say?
[00:09:49.170] – Zaheer
[00:09:51.150] – Sean
So let’s back up a second here. The TA, I want to just peel back the line here a little bit. What are you looking for specifically? Did you say you try to narrow down from 3 to 400 down to 15 to 20 stocks? Is that right?
[00:10:04.880] – Zaheer
Yeah, I’d say about 15 to 20 stocks throughout the whole year, make it into my portfolio. So it’s more a case of quality rather than quantity. And then what we do is, as you probably do with your value investing is we compound. So our winning positions will just keep on buying more. Exactly. So instead of having, say, four different stocks, I could have one stock with four positions. So it’s a far simpler way of managing a portfolio. So what am I looking for? Well, the way for me to describe it is, hopefully people will be able to come up to my LinkedIn once they come across this and listen to what we’ve got to say. On my LinkedIn, I share what I call the 4PS method, which means a four phase sequence method. It’s a term that I’ve created. So ultimately, what I’m looking for is a stock that is moving through four phases and the fourth phase is where I enter. So phase one is basically a stock that’s got a good history of performance. Microsoft, NVIDIA, what else could we look at? Hershey is a stock that’s not getting a lot of attention at the moment, but it’s a powerhouse.
[00:11:03.120] – Zaheer
Mcdonald’s, these are big stocks that have a proven history of performance. So that’s phase one. Phase two is where I’m looking for a long period of consolidation. So that it will be my base. So typically I look for a consolidation of 3 to 6 months. The way I like to describe this is think of a consolidation as the roots of a tree. So the stronger the roots, the bigger and stronger the tree will grow. So if we have a long consolidation, we can consider that as a really strong foundation for the next trend to develop. So that’s phase two, the consolidation. Phase 3 is the breakout. Now, phase 3, we’ve got to be a little bit smarter here because phase three, we want to try and avoid fake breakouts. So a fake breakout is when a stock looks like it’s going to break out from a sideways market, gets all these buyers in, and then it reverses back into consolidation, a bear trap, if you like. So we want to avoid the bear trap. So So phase three is for a confirmed breakout. And so what I look for is maybe a second or third breakout from consolidation.
[00:12:07.050] – Zaheer
So I avoid the first breakout, wait for the pull back. Next breakout is when I may enter, or I wait for the pull back and the third breakout is when I enter. So I wait for a confirmation of the breakout from consolidation. And then phase four is when I enter. The start of phase 4, that’s when I start buying the stock and that phase 4 is what could potentially last 12 to 18 months.
[00:12:27.770] – Sean
Got it. Yeah. And thank you for breaking down your strategy there. I just want to summarize for the audience. So phase 1, you got good history of performance. Good. Phase 2 is a long period of consolidation, usually 3 to 6 months. Correct. Let’s drill into that. Long period of consolidation. What does that mean?
[00:12:45.000] – Zaheer
It just basically means a sideways market. So it’s not trending. So a market does three things, right? It goes up, which is a bull market. It goes down, which is a bear market, or it goes sideways, which is a consolidation. So phase two is what we’re looking for is basically the stock has created a resistance and a support, and it’s just bouncing between that certain resistance and support over three to six months, even longer. And you know the expression, the longer the consolidation, the bigger the breakout? That’s what we’re ultimately looking for. We’re looking for a long consolidation where when the asset breaks out from it, it’s likely to move and trend over the next year to 18 months.
[00:13:23.470] – Sean
Got it. Okay. All right. So that phase two, again, long period of consolidation or sideways movement hitting that support and resistance. Correct. And then phase three has got your breakout and you’re not looking for that first breakout, you’re looking for the second or the third.
[00:13:37.660] – Zaheer
Spot on. Awesome. And that’s where elements of patience comes in. That’s the important skill that we’re regularly overlooked. Patience is a virtue. The less you do, the more.
[00:13:47.380] – Sean
[00:13:47.880] – Zaheer
[00:13:48.730] – Sean
Same thing in our strategy, too, is people, they want to be busy and there’s noise and there’s effort and it’s like, no, you want this working for you, not you working for it.
[00:13:58.880] – Zaheer
[00:13:59.470] – Sean
Okay. Perfect. And then going back to phase 4 here is buying the stock. Correct. Good. And that takes about when you go from, again, roughly 15,000 stocks down to about 3,400 down to about 15 to 20. That takes about 1 to 2 hours of work per week.
[00:14:17.890] – Zaheer
[00:14:18.570] – Sean
Got it. All right. This is good context. I wanted to just rewind here, figure all this out, and then go back to your courses. So you’ve got what we have here. I’m going back to the Thunderbird and the Phoenix. So give us a little more details and the differences between the two tiers.
[00:14:36.300] – Zaheer
Great. Okay, let’s start with the Phoenix. So the Phoenix is the whole shebang. So ultimately, the Phoenix is broken down into a video syllabus where people start. Our whole process is clearly explained in about five to six hours. As you know, financial literacy is not high on the agenda of the schooling system. It’s probably the same in the US as it’s the same here.
[00:14:56.020] – Zaheer
Agreed. It’s not taught anywhere. The schooling learning system is to go get a degree, get a job, work. You can do amazing things, but when it comes to managing your money, you’ve got to go out and figure it out yourself. And there’s a lot of information out there. What’s right, what’s wrong? People got to figure that out. So with our five hours video syllabus, we basically say to people, Hey, look, this is what’s worked for us over the last 10 years. We break down the whole technical analysis process from what makes a good chart, starting with a scanning, so how to scan to what makes a good chart to ultimately extracting profit. Those are really the three things that you’re looking at. How do you find the stock? What makes it so good? And once you’ve understood what makes it so good, how do you profit from it and safely? So that’s all understood in five hours. Then the next step is to find the assets. Now, again, here is where we help our community because we do the scanning. I’ve been doing the scanning for myself for the last 10 years. We do the scanning for our community members and then share it with them.
[00:15:56.080] – Zaheer
So all the stocks that we find for my personal portfolio, I share that with my community member. So I’m saving them hundreds of pounds each on a monthly basis and a lot of time every single day trying to find these assets themselves, which is why CEOs tend to gravitate towards us because ultimately they’re short of time, they’ve got family, they’ve got kids, all of that stuff. But they’ve got the money, they just want better returns. And then the final step is we actually share our portfolio. So when we buy a stock, we tell people, hey, look, we’ve entered Microsoft, we’ve entered Meta or NVIDIA. Here’s our entry point, here’s our entry here’s our stop loss, here’s our risk management, copy it in your portfolio. And then we guide them through the management of that stock for 12 to 18 months. So it’s the whole shebang from learning the process to finding the stocks to then actually copying our portfolio as well. So that’s the Phoenix with the thunder. And then there’s all the other good stuff that goes with it. There’s a community, there’s live days of training, there’s online webinars, all the usual stuff.
[00:16:53.720] – Zaheer
The tools that we’ve developed for technical analysis, we’ve developed the whole toolkit. We give that to our community members as well. So they get everything. With the Thunderbird, it’s just basically everything minus the copy service. So you get the whole shebang, we give you the stocks, but the only part of that process that’s missing is the copy service. So it’s a great place for people to start learning the process, what makes a good stock, how to do your analysis, how to build a routine. The Thunderbird is a great place to start. But when it comes to copying the portfolio, that’s where the Phoenix.
[00:17:25.890] – Sean
Comes in. You got to upgrade. You said copy, surface. So that means they can’t see your portfolio or know when are you buying, when are you selling, what are you buying and what are you selling?
[00:17:38.260] – Zaheer
Exactly. What we’ll do is in the Thunderbird, so the 15,000 to 3 to 400 stocks that initial screen, we’ll give them the 3 to 400 stocks in the Thunderbird so they can go through that process themselves and start looking at a list of stocks and shortlisting the good stocks for themselves. And we help them through that process.
[00:17:55.830] – Sean
Got it. All right. We like to know business models here. Price points on Thunderbird and Phoenix. What are.
[00:18:01.980] – Zaheer
You charging? Yeah, great. So the Thunderbird is a really nice starting point. It’s £150 British pounds a month. Okay. And so anytime. The Phoenix, that’s where the magic happens. That is £9,000 for the first year and then 1,500 per year renewal every year after that.
[00:18:21.820] – Sean
Got you. Okay. And then can you share with us, what are your average returns the last few years or just in general, the last 10 years?
[00:18:30.050] – Zaheer
Yeah, we average around 30 % per annum over the last 10 years.
[00:18:34.890] – Sean
That’s excellent. Well done.
[00:18:37.100] – Zaheer
Thank you. So as we were discussing offline, as you know, we’ve had a fund now incorporated in Luxembourg. And as part of having a fund incorporated, you’ve got to have an audited track record. So we’ve had the last few years of track record audited. So it’s all legit.
[00:18:54.070] – Sean
Right on. Okay, so let’s dive into that. And just to summarize here, you have your site, and I always like to give URLs, or I try to do my best to give URLs for our listeners, sublinetrading. I o. So people can go there, they can dive into your Thunderbird and Phoenix courses, and then you have, it sounds like, an investment fund in Luxembourg. Okay, tell us about that. It sounds like it’s not limited to any countries. You can really take in anybody. Is that correct?
[00:19:28.250] – Zaheer
Yes, absolutely. So people obviously come to us and say, Hey, we love what you’re doing. We’re not interested in education because not everyone has the time or the desire to learn. But they are obviously interested in the returns that we can get them. So we’ve decided to go down the route of an opportunity arose. I was actually invited out to Dubai in March to do a presentation. And off the back of that presentation, I met a lovely gentleman called Bas, who runs an asset management company called DHF Capital. He approached me, he said, Look, I love what you guys are doing. We would like to onboard your strategy as part of our fund offerings. We jumped on it. So that was incorporated last month in Luxembourg. And we are now putting the final touches to the prospectus and all that good stuff. The fund itself is called Reversi, the Reversi Fund. And Reversi, ultimately, is the two words that we associate with what we’re doing, what we’ve always done, even at Subblime Trading, which is revolution and legacy. So we feel that our approach is quite revolutionary and we want to help people create and leave a legacy for their loved ones because financial literacy is not high on the agenda.
[00:20:44.370] – Zaheer
We put the two together and we came up with Reversi. And so the fund is called the Reversi Fund.
[00:20:49.580] – Sean
Got you. This is interesting because I give you a little context in my situation. So years back, I had to make a choice between do I want to create a wealth management firm? I’m based in the state, so I want to create a typical advisor firm and serve US customers, or do I want to create a tech company? And I always wanted to create a SaaS business. Software as a service, highly scalable. We’re already getting customers at this point from different countries. And I’m like, oh, shoot. If I try to incorporate an advisory firm, I’m going to be getting questions from customers outside the states like, hey, can you manage my money? And I didn’t want to be saying no to a whole bunch of people. So I’m like, you know what? I love the education component. I love building the SaaS. I love tax, so that’s the route I went. Never went, really never fully pursued the whole wealth management part. But with Luxembourg, give us an idea here. What are the rules here? Is this one of those countries where it sounds like it doesn’t matter where you’re located, you can still invest?
[00:21:48.350] – Zaheer
Yeah, absolutely. So Luxembourg regulations carry a lot of weight. So if you go to places like Dubai, even the US, and you say, Hey, I’ve got a fund, it’s incorporated in Luxembourg, with high net worth individuals and family offices, for example, which is a space that we want to get into. If you have a fund that has the Luxembourg regulations, it becomes attractive. So if you’ve got a track record plus the right regulations, it’s something that people will pay.
[00:22:15.820] – Sean
Attention to. Got you. And are you allowed to bring on really anybody or is this limited to your accredited investors?
[00:22:25.090] – Zaheer
So the minimum investment for the fund when you take it to the this level is €125,000. So people have to be in the right position to invest financially into a fund of this size. Now, what’s good about it, though, is that you can be onboarded into… There are different terms is depending on where you are in the UK. I believe in the US, you call it SVBs. I’m just getting familiar with the US term. Is that correct? Svb where you can create groups of people… Oh, SPV.
[00:22:59.120] – Sean
Spv. That’s correct.
[00:23:00.130] – Zaheer
There you go. Spv. And so what that means is that if you go down the route of SPV, what that allows is, let’s say, 10 investors with 25… My maths is gone off, so it’s 125,000 is the minimum investment, 12,500 per person. So you can come together, group that together, and then you can be onboarded as a group under this banner of SPB. So you can have an individual deposit the whole 125,000 or you should have a group do it.
[00:23:32.420] – Sean
Got it. As soon as you said it’s special purpose vehicle, which is.
[00:23:36.910] – Zaheer
The one. That’s the one. Yes.
[00:23:38.730] – Sean
It can be like an investment mechanism. Typically, I’ve seen this more common with taking companies public or in that process and going from private to public. Your entity structure, since it’s Luxembourg, we’re so used to corporations and LLCs here in the US. What is the structure of structure of this company, Revestee? So like a private limited?
[00:24:03.640] – Zaheer
Yes, exactly. So it’s based on the share structure as well. So our investors will be released different class of shares depending on, I guess, the partnership or the relationship that we’ve agreed on because different investors will have different benefits. For example, if someone comes in and puts a million pound into the fund, they will be released a different class of shares compared to someone who may be just putting in the minimum €125,000.
[00:24:29.400] – Sean
Got it. Let’s take a quick commercial break. Do you feel like stock investing is too confusing, too time consuming, or too risky? It doesn’t have to be. If you ever considered investing on your own but you don’t know where to start, I welcome you to check out Tykr. Tykr guides you through your investment journey by steering you toward safe investments and away from risky investments. There were two main reasons why I created Tykr. Number one, I wanted to remove emotions from investing. In other words, I wanted a software to make buying and selling decisions for me so I don’t have to. Number two, I wanted to save time. Analyzing stocks can take hours, if not days, and I didn’t want to spend all day looking at the computer. I have other hobbies in life I’d rather be enjoying. If you’re interested, you can get started with a free trial. Visit tickr. Com. That’s TYKR. Com. Again, Tykr. Com. When you take the investments from your clients, are you only investing in public companies or do you also invest in private companies?
[00:25:32.070] – Zaheer
We focus on the New York Stock Exchange predominantly. Okay, got it. Good for you. In terms of our fund, primary focus will be the New York… Even though I’m based here in the UK, even on my personal portfolio, the New York Stock Exchange is always my primary focus just because of the size of the market, the maturity of the market. It’s second to none in terms of opportunities on an annual basis. But then we’ve also got UK stocks because there are a few gems that come up every year. And then also commodities and forex as well. But again, that’s only very select times when we go into the commodities and currency markets is predominantly the New York Stock Exchange.
[00:26:11.710] – Sean
Got it. Okay, that’s good to know because I know I’ve run into hedge funds as well as investment banks that invest in private businesses, and that creates a bit of a risk because you can’t always see the financial statements. You don’t know the history of the company. There’s not as much transparency there, but it’s like you got to trust the hedge fund and they’ll make your returns or they expect, right? In your case, you’re going for only public companies, which is safer.
[00:26:39.000] – Zaheer
Five to 10 years of history minimum.
[00:26:41.490] – Sean
Good to hear. Okay. And then do you have any… What certifications or what rules are you protected by? Are you part of the SEC or FINTRA or anything like that?
[00:26:52.520] – Zaheer
Yeah. So we are a private, limited liability company and registered in Luxembourg.
[00:26:57.850] – Sean
Got it. Okay. Because I know some of our listeners is going to want to know the business structure. If they were to invest, they want to know like, hey, what business am I giving my money to? And is it safe? I know not everything’s guaranteed, but people when they invest in, whether it’s a financial firm or wealth management company here in the States, or even giving money to a broker, no matter where that broker is in the world, they want to make sure their money is safe, they’re not taking it, making it not like, what is it, FTX situation? Like, hey, we’re just going to hide a company in the Bahamas and our money disappears.
[00:27:34.450] – Zaheer
[00:27:34.730] – Sean
Absolutely. To just backtrack a little bit, the 30 % returns are quite impressive. Most people I’ve talked to that have run wealth management practices or any hedge fund, they actually don’t get returns that high. So that’s pretty good.
[00:27:52.460] – Zaheer
Yeah, absolutely. People tend to overlook the power of compound growth when you select stocks that are outperforming the indices. And that’s the key to the returns that we have achieved over the years. We look at the S&P 500 as our primary indicator of what the market is doing. So the S&P overall is bullish. And how do we do that? We simply use the 200 simple moving average. So if the S&P is above the 200 simple moving average on the daily and the weekly time frames, we’re in a bull market. If it’s below the daily 200 and the weekly 200 SMA, we’re in a bear market. And if there’s a mixture above one and below the other, then we’re in a sideways market. So the S&P has been trading above the daily 200 SMA and the weekly 200 SMA since February of this year. And that’s when we started buying back into the stock market after last year’s declines. So what we do is, as part of our screening, is we look for stocks that are performing better than the average. And by holding and compounding those returns, we’ve achieved some phenomenal returns. And again, people tend to overlook the power of compound growth.
[00:29:01.320] – Zaheer
But once you understand it, once you embrace it, it’s mind blowing what you can achieve.
[00:29:06.070] – Sean
Let’s dive into a fun question here because our customers or our listeners are going to want to know, what are you investing in with some of the recent stocks you’ve been buying? So can you give us three that you recently bought?
[00:29:17.350] – Zaheer
Absolutely. So one of these sectors that is performing really, really, really well at the moment is industrials. So a stock that people should check out, a couple of stocks that we have in the industrial sector that performing really, really well is Hube H UBB. That’s Hubble. The Tykr symbol is H UBB. The company itself is called Hubble, H UBB, E, double L. We entered that around $260. It’s now trading at around $335. Another stock that is performing well for us is Palo Alto Networks. That’s PANW. And a third stock that people should look into is Quanta Services. Tick a symbol, PWR, quantum services. And they’ve all met that four phase sequence that I mentioned earlier. Performance history, period of consolidation, breakout from consolidation. And then when phase four was confirmed, that’s when we started taking our positions.
[00:30:18.900] – Sean
Got it. Okay. I always like asking this because then what I do is I punch these into Tykr, let our listeners know what they look like. Actually, you know what? As I’m looking here, I’ll share my screen. I know listeners here, this is audio, so you have to go check out Tykr to see what these look like. But I’ll pretty much explain what I’m looking at. But anyway, this is always fun. So Hubble is a watch inside Tykr. It doesn’t mean it’s bad, but their score is 56 out of 100. Anything over 50 is good. Pretty strong financials. The issue here we see is the margin of safety. I’m just jumping over to… And that’s really driven by the EPS. So let’s take a quick look at the financials tab. Let’s see what the EPS looks like. Relatively flat, it did jump up in the recent year, but let’s go to quarters. Okay, some nice jumps, it looks like in the recent quarter, then flat. That’s why it’s not a big margin of safety. It doesn’t mean, again, horrible thing, but worth paying attention to. And this company here, just looking here, designs, manufacturers, sells electrical electronic products in the US.
[00:31:25.410] – Sean
Lighting controls, wiring, power utilities. It sounds like there we go. We’re looking at a screen here that’s got power grids. Yeah, right on. Hey, Warren Buffett style, boring businesses, definitely necessity. But looking at this is what’s interesting is strong financials, but looking at the five year returns, 195 % over one year, the returns are 80 %. Wow. Solid. Really solid.
[00:31:55.200] – Zaheer
Yeah. So I take this stance just to add to this. I take this stance that a stock is simply a piece of paper and is worth what someone is willing to pay for it. Regardless of our thoughts and opinions and our analysis, if a stock is trending up and it continues to go up, that means there’s buying power behind that. And that’s a trend that you potentially want to get into. And the reverse is true. If a stock is dropping in price, it’s only likely to continue dropping until it confirms a reversal to the upside. So buying stocks that are on the way down, people land up in that land at catching a falling knife scenario. Hence why I like to wait for that base breakout confirmation and then start buying into stocks just so that I’m on the right side of the market.
[00:32:37.780] – Sean
We’ll jump over here to Palo Alto and Quanta in a moment. But we actually, with Tykr and I really give the credit to Phil town, as we do like buying on sale stocks as they fall. That’s a stockpiling, as he calls it, and we call it as well. That’s where you make your biggest returns is those on sale stocks on the market really falls like late 2021, most of 2022. Great buying opportunities because then your returns become really big. Absolutely. Prior to that, it was what we call the COVID dip. 2020 is really February, March, April. Great buying opportunity. It pulls everything down. But buy those on sale stocks because those stocks, those earnings reports come out, which significantly beat estimates. And what happens is stocks, it’s like a slingshot. They can just take off a market.
[00:33:28.360] – Zaheer
And you’ve got, for example, NVIDia and Meta, really good examples of that, except from the recovery of last year, probably given by AI.
[00:33:37.100] – Sean
Yeah, we’re just jumping here to NVIDIA, then we’ll jump.
[00:33:41.240] – Zaheer
To the other two. Nvidia is in my portfolio as well. I got in with that. So really performing well.
[00:33:47.460] – Sean
Nvidia, you’ve got a watch. Margin of safety is in best. And I’ve looked at this recently just because the EPS hasn’t been growing significantly. But the score is 83 out of 100, which is good.
[00:34:00.750] – Zaheer
Can you elaborate on margin of safety? What you mean by that?
[00:34:03.750] – Sean
Yeah. So that’s the share price and the discount off the fair value and the fair value here you see. And this is a… Let’s actually jump to Hubble. We’ll go back to Hubble, which share price is 35, fair value is 253. That’s what the price is expected to be in 10 years. What we do is we calculate the EPS growth rate over the last five years, but we look at the quarters. So we’re looking at quarter over quarter. And if it’s going up, we use a compounded algorithm to quantify what it’s going to be in 10 years. And if it’s going down or flat, then of course it’s going to be flat or down. In this case, it shows fair value in 10 years, 253. Probably not realistic because this company is doing pretty well, but it’s just the EPS as we looked at is relatively flat.
[00:34:53.240] – Zaheer
Right. Okay, interesting.
[00:34:54.350] – Sean
But yeah, let’s jump to your second stock here. Palo Alto, I am familiar with their watch and Tykr scores, 50 out of 100 margin of safety is also 0 %. And we can look at that EPS real quick. Again, we did break into the positive. We go year over year. It was negative for a while, but it went from negative $5.18 to negative.9. So although it’s still negative, that’s a pretty significant improvement. So that is a good sign. And then this is cool. Something’s working here with what you’re doing because I’m looking at the returns, five year returns, 252 %, one year return is 43 %, so that’s still really solid. And then your third stock here is Quanta Services that’s at PWR. Also, watch, scores 56 out of 100. Margin of safety, also 0 %. So again, that EPS probably isn’t growing significantly fast. But if we’re looking here, the five year returns, 480 % and then the one year return 52 %. So pretty solid. You got three solid stocks here that have performed very well. And for context, too, we always start with Tykr, which is that math part of investing. But then we also use a strategy that really Warren Buffett has used, but Phil Town has really made a framework out of it, which is the 4 M.
[00:36:22.580] – Sean
So we start with that margin of safety, which is all the math. Then we move on to the meaning, moat, and management. The meaning is the business model, the revenue streams, how does it make money? If you have more revenue streams, you have a more diversified business model. Think your Microsofts or Google’s are great examples. Then you have your moat, which is how does this stack up against the competition? Then you have the management. What is the track record of the CEO? And if you put all those together, we have a forum checklist in our tool, you really reduce the risk of losing money and increase your risk of making money. So that’s one difference from what you’re doing. But either way, you do have a sound strategy based on the returns you’re getting in these industrial stocks.
[00:37:03.480] – Zaheer
Yeah. One of the key components we look for with stocks is stocks that are printing new all time highs. So when it breaks out of that consolidation and starts trending to the upside, it’s not only trending, but it’s printing new highs. So stocks that are printing new all time highs tend to cover ground very quickly over the next 12 to 18 months before a correction tends to come in. So that’s another key component, hence why those stocks I shared with you now have just moved so quickly. Sure.
[00:37:35.570] – Sean
Well, to the listeners out there, if you’re interested, you can definitely go check out sublimetrading. Io is probably a good place to start at the end. I’ll turn it over to you and ask you where people can reach out to you. But what I’d like to do next is jump into the rapid fire round. This is the part of the episode where we get to find out who Zahir really is. Yeah, thank you. Right on. All right. So if you can try to answer each question in 15 seconds or less.
[00:38:02.770] – Zaheer
You ready? Yes.
[00:38:04.140] – Sean
All right. What is your favorite podcast?
[00:38:06.310] – Zaheer
I like podcasts that I can learn something about the world in general. History is a big part of what I like to do, past and present. So I really like the Empire files by Abby Martin.
[00:38:16.790] – Sean
I just jumped over to her YouTube channel and she’s got 310,000 subscribers.
[00:38:23.330] – Zaheer
She’s an amazing lady.
[00:38:24.460] – Sean
Yeah. A lot of cool content there. All right. You piqued my interest. Nice. Great. All right, next one here. What is a recent book you read and would recommend?
[00:38:34.430] – Zaheer
I read The Spook Who Sat by the Door by Sam Greenlea, which was fascinating. It’s a fictional story of Dan Freeman, the first black CIA officer and ultimately his trainings involved with the CIA. So a great book.
[00:38:52.940] – Sean
Nice. Thanks for that recommendation. All right, movie question. What is your favorite movie?
[00:38:58.090] – Zaheer
I always find it difficult to answer this question because there’s so much good stuff out there. But a movie which I like, which I think is just so beautiful is House of Flying Dagers.
[00:39:07.500] – Sean
Really? Okay, I’ve heard of this, but I’ve never seen it.
[00:39:10.380] – Zaheer
It’s one of those new school martial arts movies, but it’s just so beautifully filmed. It’s from 2004. It’s got Zhang Zhe, I think that’s how you pronounce her name. Visually, it’s just a stunning masterpiece. There’s this one scene where she’s dancing and she’s got this traditional Chinese outfit on, but she has to hit a drum and she’s blindfolded. It’s just stunning. People should watch it.
[00:39:43.000] – Sean
So for the listeners, this is a lead actress that was also on Crouching Tiger, Hidden Dragon. I just jumped over to IMDb, absolute best website out there for an app for movies, in my opinion. Yes, exactly. Okay. I’m adding to my IMD watch list as we speak. Good recommendation. Cool. All right, we got a few business questions here. First up, what is the worst advice you ever received?
[00:40:11.040] – Zaheer
The worst advice I would say just goes back to my early days of day trading when I was encouraged to day trade and sit in front of a computer and make money. And it hands down, probably the worst advice I’ve been given. I think we’ve all tried silly things such as pyramid schemes. Back when I was growing up, pyramid schemes were all the rage. But I can park that to one side. I’d say I was young and stupid when I got involved in that stuff. But in my adult age, when I was able to formulate my own thoughts, works in a logical way, I’d say people who encouraged me to day trade was.
[00:40:48.950] – Sean
Probably the worst advice. Bad advice. Thanks for that transparency. We’ve all done stupid things, and I remember the days, yeah, you’re right. I think it was the late 90s, early 2000s, pyramid schemes.
[00:41:04.330] – Zaheer
They were all the rage, right? Your friend would come in and say, Hey, I’m doing this. And you’re like, Yeah, get me involved. And I had one friend who walked me, it was in Kensington, and he walked me past the intentionally he walked me past the Ferrari showroom. And by the time you turn up to the thing, you’re so hyper topped, you’re like, Yeah, I want to get involved. And you’re just like, Oh, my God. It’s just, yeah, it’s what it is. I think it’s still the same. Nothing’s changed.
[00:41:25.970] – Sean
Right, exactly. All right, let’s flip the equation here. What is the best advice you have ever received?
[00:41:30.980] – Zaheer
Stay true to yourself and just try. Got nothing to lose. I can just go on. I think the best advice I was given is just stay true to who you are. There’s so much pressure out there to be someone different. Stay true. When I say different, I mean different to who you actually are, not different. You want to be different. You don’t want to be like people out there. There’s nothing wrong in being different. So stay true to who you are and your path will unravel.
[00:41:59.820] – Sean
Yes, that’s great advice. There’s a lot of people that are not being themselves and try to be a version of themselves that is safe to other people. Exactly. Because they don’t want to offend or ruffle any feathers out there. It’s like, no, you just got to lean into who you are and move forward.
[00:42:16.660] – Zaheer
Safety in numbers. If you go off on your own way, it’s a very isolating journey. But what happens is that you have all of this empty space that allows for all of these new energies and relationships to come in. Me and you would never have connected if it weren’t for this journey that I’ve been on. And it’s been an absolute pleasure connecting with you. So be yourself, stay true to who you are, and it will come good.
[00:42:37.090] – Sean
Yes. Awesome. Great advice. All right. Last question here is the time machine question. If you could go back in time to give your younger self advice, what age would you visit and what would you say?
[00:42:46.940] – Zaheer
You know what? I think I just go back to just before I went started university because I think this is the thing. If it wasn’t for university, I wouldn’t be here today because I hated university so much with a passion. I was studying something that had no interest in that because I went through that over four years. By the time I came out, I was determined to follow a path that I did want to create and enjoy and be true to. But if I could go back to just before university, I’d probably say to myself, Look, if you’re going to study something, make sure you have an interest in it. So I would have probably studied software engineering, but who knows? I would have studied maybe a language or psychology or something that I’m quite interested in in today’s history. I probably wouldn’t have been software engineering.
[00:43:32.250] – Sean
Right on. All right. And where can the audience reach you?
[00:43:35.820] – Zaheer
So our website is a great place to start, sublimetrading. I o. But I’m really active on LinkedIn. I used to be a LinkedIn snob up until about, I think, October and November of last year. And then I just committed to it. I took it upon myself to go, Hey, listen, give LinkedIn a chance. Post every day, comment, get to know people, see what’s out there. And I’ve really taken to LinkedIn. It’s been quite enjoyable. So if you are on LinkedIn, please search for my name, Zahir Anwari. Send me a friend request, send me a hello. Say you listen to me on this podcast and let’s connect. Awesome.
[00:44:12.140] – Sean
Paul Zahir, thank you so much for your time. This is great.
[00:44:14.530] – Zaheer
Thank you. It’s been an absolute pleasure. Thank you so much.
[00:44:17.110] – Sean
For the opportunity. All right, we’ll see you.
[00:44:18.920] – Zaheer
Thank you. Take care. Bye bye.
[00:44:22.120] – Sean
Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for spending some time with me. Also, if you have a moment, could you please head over to Apple podcast and leave a review? The more reviews we get, the more Apple will share this podcast with the world. So thanks for doing that. And last thing, if you do hear any stocks mentioned on this podcast, please keep in mind this podcast is for entertainment purposes only. Please do not make a buy or sell decision based solely on what you hear. All right, thanks for your time. Talk to you later. See you. Bye.