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Last Updated : Sep 06, 2019 01:08 PM IST | Source:

This value investor with 30 yrs of experience gives 5 tips to create crorepati portfolio

History suggests that it pays to be bullish on India and the next 25 years are likely to be better than the last 25, as opportunities to make money will only grow, says Ramesh Damani.

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Learning never stops on D-Street, Ramesh Damani, member, BSE, tells CNBC-TV18 in an exclusive interview on Teachers’ Day, sharing his 30-year market journey.

"A teacher affects eternity; he never tell where his influence stops." Damani quotes American historian Henry Adams, as he turns a ‘teacher’ to offer tips on spotting an opportunity and creating wealth:

Compounding: Start early and invest wisely


Yes, among the many things that time can do is also create wealth for investors. Damani asks students to start saving early and invest wisely to take advantage of the power of compounding.

If you are an MBA and saving Rs 10 lakh a year to retire rich, the way to do it is compounding and investing early.

In your 30-year carrier, you could compound the money 10 times every three years, and the same Rs 10 lakh, which you are saving regularly, will become Rs 100 crore at the end of 30 years. But, it is easier said than done.

If you understand compounding, then a big part of your battle to attain financial freedom has been won.

Invest wisely in a bear market

When everything seems to be heading south, investors get cold feet and don’t put fresh money into markets.

Damani asks them to use bear markets to invest in stocks wisely and reap benefits of higher returns in a bull market.

This too shall pass

Bull and bear markets move in a cycle. Right now, the broader market is in a bear phase, while benchmark indices are up with small gains.

“I can feel it too that it is a slow-moving bear market, almost never-ending. But, the word of wisdom is—this too shall pass,” says Damani. Every boom has a seed of a bust and vice versa.

Good mentors and books

Damani advises young investors to read, a lot, and look out for mentors who can hone their skills. Investing is all about discipline and reading helps get there, he says. To become a great investor, one needs to read at least six to eight hours a day.

History speaks for itself: the Sensex was at 100 in 1979 and touched 40,000 a few months back. It translates into 400x move and that, too, without dividend.

It pays to be bullish on India

The next 25 years will likely to be better than the last 25, as opportunities to make money will grow.

In the last 25 years we saw many ups and down, including financial crises and geopolitical concerns, but the index managed to give a 16-17% compounded rate without dividends.

“By the time second-quarter results come in most of the bad news would be factored in and we could see a rebound in some of the midcaps names,” says Damani.


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First Published on Sep 5, 2019 01:22 pm
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