Sarhan Capital’s investment approach is designed to capture above average risk adjusted returns from global capital markets targeting 20% annual returns.
- Ability to capture trends in bull & bear markets
- Weekly analysis of capital markets
- Technical Analysis coupled with pattern recognition and weekly trend confirmation
- Global fundamental views that are formulated with an intermediate term horizon
- Broad diversification of analysis refined into concentrated positions
- Rigorous risk management
Interpret, Not Predict, Market Action
The trading decisions are derived from a weekly analysis of global capital markets. The weekly analysis does not aim to predict market action; instead it simply interprets what is actually happening. The strategy combines fundamental and technical analysis with a strict risk management overlay aimed at achieving above average risk-adjusted results in both bull and bear markets.
How We View The World – Markets Trend
Fact: Capital markets trend. Armed with this knowledge, our approach is designed to identify and capitalize on these invariable trends. Sarhan Capital believes that capital does not know any borders, which makes it truly fluid; hence capital will follow the path of least resistance and will always flow to an investment with the most favorable risk/reward ratio. This creates the probable trends that we capture. Sarhan Capital looks to identify, as early as possible, where capital will flow at any given moment and capture intermediate term trends as they develop in real-time.
Competitive Advantage – Psychology Is Constant
One of Albert Einstein’s greatest discoveries occurred when he realized that the speed of light is constant. Keeping that in mind, one of the Sarhan Capital’s greatest discoveries occurred when we realized that markets and players change, but human nature remains constant. Human nature has been the one constant that has occurred in every single major bubble and subsequent bust throughout recorded history. Sarhan Capital has developed a unique system to remove human emotion from the decision making process. All major trading decisions are developed while the market is closed and written down in a clear detailed and concise fashion with annotated charts and presented to our clients. Then, our team simply follows the plan which allows us to be prepared for all possible outcomes.
Use of Technical and Fundamental Analysis:
Sarhan Capital believes that most people misuse fundamental and technical analysis. Since most people have a deep desire to “know” what will happen, they use these tools to predict market action. However, Sarhan Capital believes that no one “knows” what will happen tomorrow, especially in a complex and fluid macro environment. Therefore, the misuse of these tools is what leads to subpar performance by so many people in our business. Additionally, most people’s psychological barriers prevent them from operating comfortably in the “unknown.” This causes an insatiable need for a false predicative tool or some other nonexistent and counterproductive instrument. To circumvent this common quandary, Sarhan Capital remains humble and does not try to predict anything. Instead, Sarhan Capital is comfortable operating in the unknown thanks to stringent risk management factors and the proper use of fundamental and technical analysis; to interpret what is actually happening. All decisions are made based on what is actually happening in global markets, not on what any one person thinks will happen.
Sarhan Capital and all of its subsidiaries employ a stable and proprietary approach to trading capital markets. The approach combines fundamental and technical analysis with stringent risk management criteria to develop sound trading themes. Once developed, our trading strategy employs trend analysis, which enables us to identify trending markets in the earliest stages then make decisions of their potential moves, on either the long or short sides. The investment strategy initially utilizes fundamental analysis to select optimal conditions, and then uses technical analysis and chart patterns to determine entry and exit signals and identify strong trading opportunities.
Typically, trades are placed via an electronic trading platform and are entered with supporting stop orders expressing pre-determine risk levels. Prior to placing trades, position size and risk/reward ratios are carefully calculated to incorporate proper risk management tactics. The core of this model relies on a strong global macro view. Market fluctuations are driven by a host of other factors which must be assessed and acted upon, including but not limited to:
- Market Direction (Bull, Bear, Sideways)
- Fundamental Data
- Technical Indicators
- Economic Cycles
- Inflation Cycles
- Political Landscape
These factors are carefully analyzed to make well informed decisions from a vast spectrum of global capital markets.
Our investment approach is based on the simple notion that: fundamental analysis is used to develop consistent trading themes while technical analysis is used to determine when to enter and exit each position.
Supporting our investment thesis, we further employ a proven risk management strategy intended to mitigate risk while striving to achieve consistent results. This system helps to ensure that losing positions are immediately closed out when losses fall below a given threshold. Furthermore, we believe that any effective trading strategy should consistently focus foremost on this type of risk management criteria to avoid wild profit and loss swings. By striving to achieve consistency and properly incorporating risk management we believe these are the necessary steps in capitalizing on market trends.