This is the eighth wonder of the world, according to Ramesh Damani

Market veteran Ramesh Damani prefers technology and PSU stocks at the current juncture in the Indian market and believes there is a great opportunity in defence and rail stocks as well.

"Right now, I am more invested in PSU stocks,” he said. "Many of the PSUs are good businesses," he said in an interview with CNBC TV18.

Citing the example of Bharat Electronics, Damani said, "It was a Rs 20 stock with a Rs 2 dividend built in and Rs 160-crore market cap. Now it has a Rs 60,000-crore market cap and it could double from these prices too. So it has created long-term wealth. The mistake people make often is to bunch FMCG stocks versus all PSU stocks."

Terming compounding as the eighth wonder of the world, the ace investor said the biggest learning that one can take from the market is how to compound money.

"You learn that when the iron is hot, you have to strike it and then go in for the kill," he said.

He also shared his mantra to be successful in the Indian markets: "Be a pig when conviction is high". A pig in market parlance refers to a high-risk — often impatient — kind of investor.

"The trick for me has always been to push myself to buy bigger positions. There is a saying on Wall Street that the bulls make money, the bears make money, but the pigs get slaughtered. But that's not quite true. Because sometimes you need to be a pig in the market,” he explained.

Also read: Indian market poised to hit new highs in coming quarters: Ramesh Damani

The BSE member expects benchmark index Nifty to hit 20,000 points and remains bullish on Indian markets for the next 30 years — a period he believes will be even more exciting than the past 30 years.

Talking about the late legendary investor Rakesh Jhunjhunwala, Damani said it is crucial to have good mentors in life.

“The first Wizard I interviewed in 2005 was Rakesh Jhunjhunwala. Since he was such an important voice for the financial markets, I felt that I should give him an all-star tribute. We will look back and reflect on his learnings and his legacy over 30 years in the financial markets,” said Damani.

Also watch: Ramesh Damani looks back on the journey of Rakesh Jhunjhunwala – The trader, investor and friend