Want to grow your portfolio to Rs 100 crore? Follow these 6 tips by Ramesh Damani
Fabled value investor and Chairman and Independent Director on the Board of Avenue Supermart Ramesh Damani speaking to Moneycontrol outlined his investment philosophy. Here are the mantras which Damani gave in the 23-minute interview:
In a freewheeling chat with Santosh Nair, Editor, Moneycontrol, ace investor Ramesh Damani gave some tips about wisely growing your money. Read on to find out how you can do so.
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Do not buy in the red: Discussing the stock market crash of 1992, Damani said he used the time to develop his investment philosophy. "I read very carefully that for example you don't buy stocks that have gone down a lot in bear market, because you know they would tend to fall even more."
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Spot great ideas: Recalling his first major trade, Damani outlined the importance of spotting good stocks. He cited the example of CMC Ltd -- which later merged with TCS -- a public sector company that saw first round of divestment in 1992. The stocks were available at around Rs 10-15 a piece. The company had developed Indian Railways' reservation and ticketing system, revolutionising the experience. Despite, few people opting for the stock, Damani purchased heavily and it eventually went up to Rs 800 a share within a year.
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His investing mantra: Echoing Warren Buffett’s idea of value investing and highlighting the power of compounding, Damani said if an investor is doubling his money every three years, eventually, in 30 years, it would be 1000 times. “Suppose you start with Rs 10 lakh and double your money every three years over 30 year period, Rs 10 lakh become Rs 100 crore. So that's a phenomenal amount of money to have.”
Be a contrarian: Echoing Buffett’s principle again, Damani said a good investor is not afraid of placing bets even if the market says otherwise. "It is the art of good value investing, to be a contrarian. A lot of the picks when we bought was not met with popularity in the market. So that's part of the game, I mean, if you are scared to be contrarian you will probably not going to be a good value investor."
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Every Bull market must make you richer: Talking about learning from every market crash, Damani said, "I think each Bull market I have learnt something and in the next Bull market implement these lessons and become stronger. But the underlying lessons in all of this is buying great businesses and double your money every 3 years. If you do these two things right I think you are well ahead of the game."
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What is a great business? A great business is one that has some pricing power. If they can't raise prices or they have to pray to god before they have to raise prices, it is not a great business.
![Do not buy in the red: Discussing the stock market crash of 1992, Damani said he used the time to develop his investment philosophy. "I read very carefully that for example you don't buy stocks that have gone down a lot in bear market, because you know they would tend to fall even more."](https://images.moneycontrol.com/static-mcnews/2018/09/1-red-fall-bears-rupee-low-1.jpg "Do not buy in the red: Discussing the stock market crash of 1992, Damani said he used the time to develop his investment philosophy. "I read very carefully that for example you don't buy stocks that have gone down a lot in bear market, because you know they would tend to fall even more."")
