We are pleased to present this week Mr. Aly-Khan Satchu, the CEO at investment advisory firm Rich Management.
Aly-Khan, who was born in Mombasa, spent the first 15 years of his career in London after studying Law at the University of Durham. He started working for leading financial institutions, such as Credit Suisse First Boston, where he ran global trading desks.
Aly-Khan has held key roles in leading global financial institutions, having served as Vice President at Credit Suisse First Boston in London, Director & Treasurer at ANZ Investment Bank in London, and as Executive Director at Sumitomo Bank, also in London.
Aly-Khan has since then written his own book ‘Anyone can be Rich’. He is a guest commentator at Aljazeera, CNBC as well as a columnist at Quartz – where he advises on global finance. Today Aly-Khan is the CEO at Rich Management and an investor at the Nairobi Stock Exchange and several other African and International Stock Markets. We are today speaking with Aly-Khan about the upcoming year we have ahead of us, the African economy post Covid, the stock market and more.
Q1) You have quite a story behind you. Who/what would you say has been the key to motivation throughout your career?
A1) I was always fascinated by the world. For many, their ambition is to walk out on the Pitch at Old Trafford, or to swing a bat at Lords. For me from a young age, I was running a ‘’fantasy’’ portfolio in my mind. My excitement was derived from ‘’keeping score’’ from trying to predict the future. Then one day, I arrived on the trading floor at Credit Suisse First Boston and I remember thinking to myself the trading floor was bigger than Old Trafford and I realized then that I had actually been waiting for precisely this moment my whole life. The motivation was therefore first and foremost a continuous intellectual exercise of understanding the markets, then it was one of seeking to build businesses around that understanding and building teams.
Q2) We have many readers that are in their early years of trading and investing, any advice for the “2021 self-maker”?
A2) You have to be passionate about what you do. You have to live and breathe it. You have to a deep and continuous intellectual curiosity and you have to create serendipity. On a trading floor that starts by being first in in the morning and last out in the evening because it is around the wings of the day that you create serendipity, you get the chance to meet others beyond your discipline and you are then first in everyone’s minds when opportunities open up.
Q3) You started trading stocks in the early 90’s, have you spotted any specific trading “trends” that are re-current?
A3) I discovered a passage in the Bible recently;
Ecclesiastes 1:2-11 2 Vanity[a] of vanities, says the Preacher
Vanity of vanities, says the Preacher, vanity of vanities! All is vanity.
A generation goes, and a generation comes, but the earth remains forever.
The sun rises, and the sun goes down, and hastens to the place where it rises.
What has been is what will be, and what has been done is what will be done, and there is nothing new under the sun. Is there a thing of which it is said,
“See, this is new”? It has been already in the ages before us.
There is no remembrance of former things, nor will there be any remembrance of later things yet to be among those who come after.
There is nothing “new on the Street’’, everything that is happening now has happened before.
‘’Greed and Fear’’ -we are in a greed phase now.
Weimar Republic – we are also in the early stages of the ‘’Weimar’’ phase.
And, of course , the Internet is the great big development of my generation.
Q4) Bitcoin has become a massive trading topic in Asia, U.S. and UK. Is Bitcoin as much of a “hot topic” in Kenya? What’s your personal opinion on Bitcoin?
A4) Absolutely. Bitcoin is a very big topic from Nairobi to Lagos, from Caracas to Singapore. BTC has been embraced at the periphery because at the periphery the biggest real world challenge is maintaining the value of money and BTC has achieved this for millions of people. This remains the overarching point. If people have lost trust in the Federal Reserve then imagine the situation in Harare, Caracas and other places. Therefore, I think Bitcoin has been mainstreamed. Of course, the current price close to $60,000,00 is parabolic and due a consolidation. I think the brilliance of Bitcoin is that it cannot be bunker hunted.
Q5) On your website you are giving away for free a PDF called “What will happen in 2021”, tell us about that?
A5) Essentially at the beginning of the year I try and look at the markets for the next 12 months. And in that article I was trying to predict what might unfold. I believe we are at a unique juncture and that in January we were in the ‘’rocket fuel’’ moment but that investors need to appreciate they are now pirouetting on top of the most expensive market in history.
Q6) Looking at where the world stands today, from a financial perspective point of view, do you think the stock market generally would suffer or benefit from a second wave of Covid?
A6) That’s an interesting question. I have also had to study epidemiology in order to appreciate the nuances and contours of the current situation. My view is that there is a lot of vaccine euphoria and that we are now in a race with the variants. I expect another wave and that the markets will retrace. Of course, the new trends [digitization et al] will re-assert themselves.
Q7) What is your take on the recent GameStop event (NYSE:GME) -ordinary citizens uniting to prevent hedge funds from taking down the company?
A7) I thought it was a perfectly legitimate trading strategy. I myself have been ‘’short squeezed’’ before and thought a lot of the debate was very elitist. The merry band of redditeers landed on a perfectly legitimate trading strategy and I think regulators were too quick to protect the hedge funds and banks at the expense of the retail investor. We will see GME replay in the gold and silver markets this year and that’s why I am so bullish about the price of precious metals.
Q8) If the Covid-19 restrictions in Kenya continue until the end of 2021, will it have a permanent long-term impact on Africa’s economy?
A8) Firstly, there is a myth about how Africa dodged a Bullet, it didn’t. Firstly, the number of cases and the mortality rate is grossly undercounted. Secondly, the economies which were over borrowed and much of the borrowing misspent was dealt a body blow by COVID. The economic emergency is real and policy makers across the continent are still in La La Land. The continent has been badly let down. It will take at least 36 months for our economies to recover.
Q9) How does the future of Nairobi look both economically and socially?
A9) Nairobi is a wonderful city and the most bullish thing about the future is our human capital. Just look at remittances to get an idea around African talent. We just have to uncork that talent at home. So yes, I am bullish in the medium term but also I am a realist. We need better leadership across the continent.
Q10) There’s a lot of talk about the British continuous lockdown at the time… Do you believe that the United Kingdom’s economy will fare better or worse in 2021?
A10) I think the UK made a bad bet withdrawing from Europe. It was an emotional decision about an island and people are looking back at a past which is long gone. So I expect it to be tough for the foreseeable future in the UK.
Q11) Our final question: among the people you know, who’s interview would you want to read next and why?
A11) Naval Ravikant, practically every pronouncement makes me think.
Thank you Aly-Khan for sharing your thoughts and time with us! We are looking forward to closely follow stock market in 2021.
Maja Säholm Westling
Next article, EXCLUSIVE INTERVIEW: Leonhard Weese, president of The Bitcoin Association