Investors are grappling with volatile markets amid concerns about AI spending, valuations and escalating geopolitical tensions.
BNN Bloomberg spoke with Shiraz Ahmed, CEO of Sartorial Wealth, about how quantitative investing models identify stocks with strong momentum and risk-adjusted returns.
Key Takeaways
- Quantitative investing models often prioritize momentum and risk-adjusted returns, using metrics such as Sharpe ratio and volatility rather than traditional valuation measures alone.
- Costco has regained positive momentum after late-year volatility, supported by rising membership income and international warehouse expansion.
- Novartis is benefiting from its shift to a pure-play innovative medicines company following the Sandoz spinoff, with oncology drugs driving growth.
- Devon Energy has recently screened as a buy in momentum models as energy stocks rise alongside geopolitical tensions affecting oil markets.
- The investment strategy discussed is long-only and rotates positions frequently, prioritizing momentum signals over dividend income.
Read the full transcript below:
ANDREW: It has been something of a tough stretch lately for investors. Concerns over AI, valuation and overspending, and then the Israeli and U.S. attacks on Iran. Let’s get more from Shiraz Ahmed, CEO of Sartorial Wealth. You always like to remind us you’re quants, so you’re less interested in price-earnings ratios, for example.
SHIRAZ: Yes. I mean, it’s a factor that we look at, but that’s not our primary variable.
ANDREW: What are the big variables? Is it momentum that is crucial to you?
SHIRAZ: Yeah, so momentum is probably the biggest one, but not momentum in its generic sense. We look at momentum, risk-adjusted return, Sharpe ratio and standard deviation. There are a bunch of variables. There’s a lot of math behind the scenes, but really it’s all about trying to find who’s got the hot hand. We want to give them the ball.
ANDREW: As a math guy — this is off topic — what do you think about the rise of these prediction markets? They’ve evaded regulation. They say futures regulators are in charge of them, but people are betting on all kinds of things.
SHIRAZ: They definitely are. I don’t think that’s going to change. Human nature is an interesting thing. These are ones that we are always watching. It’s an ever-evolving situation, so it’s one that we keep a close eye on.
ANDREW: You’ve got some ideas for us. Costco — COST — what attracts you to that stock right now?
SHIRAZ: Costco is a household name. It’s one that most of us know. My household tends to go there quite a bit as shoppers, and I can’t not spend $500 whenever I walk in there and munch on many treats. But jokes aside, it has been under positive momentum over the last little bit. It had a rough end to last year, but since January it has popped up pretty substantially. It’s a name that we like and, as of right now, it has recently scored well in our model, so we did take a position in it.
ANDREW: Let’s maybe have a look at a five-year chart, because it was a darling for a long time. It has that loyal customer base and automatic profits from membership fees.
SHIRAZ: Absolutely. Their membership fees have been increasing year over year. In addition to that, they’re expanding more internationally. It’s a story and a theme that we like. It was a darling for quite some time. Last year had a little volatility toward the end of the year, but it’s still a name that we like.
ANDREW: I think it is interesting. Apparently a narrow range of products. I mean, it’s ridiculous — you go into some stores and there are 50 types of toothpaste.
SHIRAZ: Of course. But it’s also one of the few retailers that actually has an influencer movement behind it as well. That’s another really interesting point to note about Costco. If you look on social media, you’ll have people talking about their top Costco hauls. I haven’t really seen that for a lot of other retailers.
ANDREW: Interesting. It just has that cultural traction.
SHIRAZ: Yeah, absolutely.
ANDREW: There’s a Costco business centre near here. I think it’s more wholesale-oriented and you can buy three-kilogram blocks of blue cheese — fantastic. I’m just trying to work out how I’ll explain that at home, how we’ll go through three kilograms. I really like cheese. I love my blue cheese.
Novartis, a global pharmaceutical company — what draws you to this name right now?
SHIRAZ: Again, other than the general momentum of the story overall, pharmaceuticals are an interesting play. It’s one that has done reasonably well. They’ve gone through some acquisitions at the end of last year and, after the spinoff in 2023 of their generics business Sandoz, we like the fact that they’re a pure innovation-oriented play. It’s a name that we like. It’s been screening well from both a fundamental standpoint and a momentum standpoint.
ANDREW: Maybe we could put up a five-year chart. Do they have any presence or drug in the weight-loss or diabetes sphere?
SHIRAZ: Not to the most part. A lot of their focus is in cancer. Oncology is one of the bigger areas.
ANDREW: Right. And of course, as the population ages, cancer shows up more frequently. So Novartis getting the nod there, and certainly that stock has been a winner over five years.
Finally, Devon Energy — it’s a shale specialist in the U.S. What does this stock have going for it?
SHIRAZ: Other than the fact there is a proposed merger that is being voted on right now with Coterra. That’s one that’s out there. It’s a name we are liking from a momentum standpoint. They’re seeing a short-term pop, like many energy stocks right now, unfortunately due to the conflict in the Middle East. It has been a strong performer for quite some time. It was a name we’ve actually been in and out of several times over the past few years, and we are back in it again as the fundamentals have improved.
ANDREW: It’s tricky with oil stocks gauging momentum because they trade so much on the crude price.
SHIRAZ: Absolutely. Because of the volatility, that’s part of the reason why we were out of it for quite some time. But recently, over the last couple of months, it has started to score better and our model picked it up as a buy.
ANDREW: The dividend yield is around two per cent. Is that an important part of your model?
SHIRAZ: If we hold the stock long enough to actually get the dividend. Often we are rebalancing on a monthly basis, so if there’s a large volatility shift within a month we may or may not hold it longer. But we’ve been in some names for over a year at times. If it keeps scoring well and it’s a name we like, we’ll hang on to it.
ANDREW: They also have a variable dividend tied to excess free cash flow.
SHIRAZ: Yes. It’s one that will jump around a little bit, which is part of the reason why we’re not necessarily buying it for the dividend. We’re buying it primarily for the price momentum.
ANDREW: And what about oil? I know we’re talking equities here, but do you ever look at commodities in terms of momentum?
SHIRAZ: It’s a bit of a different dynamic. We’re primarily a long-only equity strategy. However, we are looking at the underlying. Oil has been under huge positive pressure recently given what’s going on in the Gulf region. But prior to that it was actually quite flat. It hadn’t been doing too well for quite some time until very recently. We want to have a position in energy going forward, and this is part of how we play it.
ANDREW: And you do short things occasionally?
SHIRAZ: No, we’re not shorting. We’re long only.
ANDREW: Sorry, okay.
SHIRAZ: We’re long only. This is a name that we may rotate in and out of. We don’t take leverage, we’re long only and we do have a lot of rotation.
ANDREW: You must be tempted to introduce shorting to the model if momentum breaks down.
SHIRAZ: It is tempting, but it’s a dangerous game because there’s theoretically unlimited loss with a short. One thing we may look at is more on the hedging side, but pure shorting is something we have to be very cautious about. We’re all about suitability and investor benefit.
ANDREW: We’d better leave it there. Shiraz, thank you very much.
SHIRAZ: My pleasure.
ANDREW: Shiraz Ahmed, CEO of Sartorial Wealth.
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This BNN Bloomberg summary and transcript of the March 10, 2026 interview with Shiraz Ahmed are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
