On April 3, Igor Klyushnev, the Deputy CEO for Freedom Holding Corp. (FRHC, OTCQX), hosted a presentation at the company office located in Berlin, Germany. In his speech, the financial expert focused on the opportunities available in the US stock market, and the transformation process experienced by the investment industry in the digital era.
Igor Klyushnev and His Colleagues from Freedom Holding Corp., Berlin
Igor Klyushnev analyzed how the composition of the leading US stock index, S&P500, changed over the last few decades, highlighting that, as of now, its top 5 are hi-tech companies. The latter made their long way from a startup to large sustainable business, successfully overcoming the dotcom crisis that occurred in the NASDAQ in 2000 and the mortgage crisis in 2007-2008.
According to Mr. Klyushnev, both the dotcom crisis, the largest one in tech sector history, and the recent crypto crash happened because the investors overpriced the way how innovative the companies seemed but did not pay enough attention to their fundamental potential and financial status. Nevertheless, this is unlikely to happen again now, the financial expert admits, as the hi-tech index has only large and stable corporations as its components. Besides, the market regulation improved drastically over the last two decades.
"Technologies have not only changed our everyday life or our financial portfolios, they have also changed the way we invest. The web has become the main communication channel between a broker and a client, which significantly increased the trading volume and the retail investor engagement. Order placement and execution speed has grown by a few times, this now happens literally in a matter of seconds, while the brokers even struggle to make it tenths or hundredths of seconds.""High-frequency traders drive the main trading volume today", Igor Klyushnev said when describing the current stock market situation. "Around 70% of trades are made online. This changed the market participant map entirely, as most trades are not made by professional traders, everyone who has an account with a broker can now trade. Most companies provide platforms that work in real time and are compatible with mobile devices, so making a trade nowadays means just a single click or tap."
In the next part of his speech, Igor Klyushnev talked about the unique earning opportunities provided by Freedom Holding Corp. to the clients. Above all, the expert highlighted the opportunity to take part in IPO's, also detailing the way between an IPO and a publicly traded company status.
The Deputy CEO also mentioned the way the company stocks are selected for the clients and how the portfolio management works. Among the points that are important to analytics, he named high and stable margin, competitive advantage, industry share, activity in the merger and acquisition market, and the ability to monetize those acquisitions. Speaking about the experienced US stock market players, Mr. Klyushnev mentioned Facebook, Netflix, and Microsoft. Regarding the latest most interesting IPO's, he named Lyft, while the expected ones were Uber, Slack, Palantir, and Airbnb. The shares of the latter were in a very high demand, Klyushnev added.
An important part of Klyushnev's speech was dedicated to the investment strategies and the current situation in the US stock market.
"The market is close to its highs, and a drop is coming, with all the conditions met. The recession, however, is unlikely to happen before 2020, while this year, S&P500 may well reach 3,000, which is confirmed by both fundamental and technical factors. Falls are inevitable, although, while short term corrections become bigger, the recovery also happens faster", the financial guru added.
"Predicting falls in a stock market is a difficult task, but it is not that important for a long term investor either. Using short term moves and exiting positions designed for a few years' hold just because of 10% or 12% drop is an incorrect strategy, even if you want to buy them cheap afterwards. This is trading, this brings profits, but it is not be suitable for everyone, as you've got to constantly monitor the markets and work every single day", Klyushnev admitted.
He also highlighted the importance of promoting the idea of long term investment by Freedom Holding Corp. experts, as this method does bring constant yields. With that, Klyushnev noted the risks and risk appetite must be taken into account. As examples, he mentioned diversified portfolios with various risk and yield level.
In conclusion of his speech, Igor Klyushnev talked about Freedom Holding Corp. history, current structure, and focus areas. In particular, he named the financial products offered and highlighted the competitive advantage that lies in providing the clients with analysis, information, and support. At the end of the meeting the Deputy CEO and the investment experts at Freedom Holding Corp. answered questions asked by the attendees.