Bonnishikha Chowdhury, MBR Team

MBR: Please kindly share with us your journey in the field of equity analysis.
Abdullah Al-Rezwan, CFA, FRM: I started my career in Equity Research at IDLC Securities Ltd. I was there for a year after which I joined BRAC EPL Stock Brokerage as the lead analyst covering Financials Sector in Bangladesh. After three years of Equity Research experience in Bangladesh, I came to the US for my MBA at Cornell. Upon graduation, I joined Madison Investments in their US large cap equity team as a Generalist Analyst. Recently, I have launched my own independent research service covering primarily US listed companies.

MBR: While assessing an investment prospect what focus points and approaches do you consider?
Abdullah Al-Rezwan, CFA, FRM: I spend most of the time in my research process trying to understand how exactly a company makes money. It may sound simple, but usually it is the most difficult question to answer. If you have a clear understanding of this question, your job is mostly done. I also spend a fair amount of time understanding the customer value proposition, size of the market, unit economics, competitive dynamics, and management incentives. Finally, I look at valuation to infer the embedded expectation in the stock price to take a call whether I am comfortable owning a particular business at that valuation. When I was in Bangladesh, during my early days as an investor, I used to trade a lot which in retrospect was a sign of philosophical void. But I have really evolved as an investor. I now try to follow the Buffett mantra of not thinking of stocks as some “digital numbers” on a screen, but actual businesses of which I am an owner. This ownership mentality has enhanced my time horizon considerably compared to the past. Most people say these things when they are interviewed, but very, very few actually follow this principle. I am trying to walk the talk nowadays.

MBR: How do you recognize the prospect of an equity researcher in Bangladesh?
Abdullah Al-Rezwan, CFA, FRM: An Equity Analyst’s career is somewhat tied to the overall entrepreneurial activity in a country and the overall willingness and path for the entrepreneurs to take their company to the public. Unfortunately, while Bangladesh has never been short of entrepreneurial talent, Bangladesh capital market has so far failed to incentivize and allure the entrepreneurs to take their companies public. You can only be as good as the companies you cover, especially since short selling is not allowed (not that it is any panacea either). I see too many analysts changing career after a few years, and that may not stop anytime soon unless good companies decide to be listed.

MBR: Is there any difference in the prospect of equity researchers in global market than Bangladesh?
Abdullah Al-Rezwan, CFA, FRM: The problem I just outlined in my previous answer about Bangladesh capital market is largely absent in the US. Warren Buffett has been looking at the US market for more than 60 years, and I can tell you he probably feels he needs to catch up. Unlike Bangladesh, it is still a matter of great pride in the US to ring the bell when your company goes to public although because of easy money policy, many unicorns remained private for longer than they ever did before. It is very easy to feel lost in the US market because of the depth and breadth of the market, and an analyst has
tremendous opportunity to add value because of such complexity.

MBR: What are the essential skills an equity researcher must attain?
Abdullah Al-Rezwan, CFA, FRM: You need to have insatiable curiosity because you will be a lifelong student of the market. That’s just table stakes to be an analyst in the public market. A knack for independent thinking will differentiate you from the crowd which will be of paramount importance to help investors generate above-average return. Of course, you will also model financials of a company, but you can teach yourself in the age of internet without ever setting your foot to a business school.

MBR: What are the roadblocks in general an equity researcher faces and how to mitigate those?
Abdullah Al-Rezwan, CFA, FRM: The job is difficult. If you are right even 60% of the time, you are probably one of the best analysts out there. Most analysts who enter this career are generally accomplished students throughout their academic life and are accustomed to acing every exam out there with flying colors. But once they come to this industry, they realize the real life is much messier, and more often than not, their analysis on stocks will be wrong. Many people find it difficult to deal with this psychological transition from academic mindset to practitioner mindset. The other aspect many people underestimate is the importance of building and maintaining a robust network. Research may give you a connotation of a desk job tied to reading annual reports. Yes, you
have to read a lot in this career, but you also need to master excellent oral communication skills as well as writing skills. Your ability to build a cohesive narrative in a readable format and then being able to convincingly deliver it is going to be much more important than building fancy excel models. Most analysts seriously underestimate these skills.

MBR: What was your inspiration behind establishing MBI Deep Dives? What is your strategy to reach out more people with MBI Deep Dives?
Abdullah Al-Rezwan, CFA, FRM: I am, frankly speaking, an accidental entrepreneur. Two things needed to happen simultaneously for me to pursue entrepreneurship:

a) I lost my work authorization status in the US, so I had to leave my role in previous firm; and

b) during the pandemic, I started writing regularly on twitter and to my surprise, I managed to build a following within a short period of time.

When I was thinking about my future, one realization struck me that I have been too dependent on external forces such as immigration laws that created a lot of stress in my life. I have always been very internally driven person and wanted to figure out something that would allow me to do what I want to do without the pesky immigration laws dictating anything on my career. I then came up with the idea of launching independent research service which is now subscribed by people literally from every continent of the world. I deliberately priced my research in a way that anyone who is interested
in my research would find it quite reasonable. Since I am an accidental entrepreneur, it’s still not the first identity that comes to my mind. In my mind, I am an analyst first, and entrepreneur later. I am very much focused on being a good analyst. “MBI Deep Dives” is the hypothesis to test whether I am a good analyst or not. Just like any entrepreneurship, it can certainly fail, but I don’t think I have ever enjoyed doing something as much as I did after launching “MBI Deep Dives” three months ago. Still early days and of course miles to go, but I am very encouraged by the initial reception. I hope to scale “MBI Deep dives” a lot bigger in coming years. Wish me luck.