Raamdeo Agrawal’s USP is his down-to-earth attitude and earthy wisdom. He candidly admits that he does not understand the nuances of what is happening in the stock market or in the macro environment. Yet, experience tells us that whenever investors have bought top-quality stocks at bargain basement prices and held on to them for long periods of time, they have reaped magnificent gains, he says. His valuable advice can be summed up in a few actionable points:
(i) It is guaranteed that investors will make money if they invest in the right companies and stay on for the long-term:
Raamdeo cited the example of an elderly IAS officer who bought shares of Asian Paints at the loose-change price of Rs. 1700 several decades ago. Today, after compounding at a CAGR of 29%, the investment is worth a couple of crore.
There is a lot of money to be made and it is guaranteed that investors will make that money if they buy the right stocks and hold them for long periods of time, Raamdeo emphasized.
(ii) Focus on what is important and knowable. Forget what is important but unknowable:
Raamdeo took a leaf from Warren Buffett’s timeless advice that investors make a big mistake in obsessing about macro-economic issues. While these issues are important, they are unknowable. Instead, investors should focus their attention on issues within their control such as the earnings of the company, its growth prospects, etc which are both important and knowable.
(iii) Forget GDP growth, Look for stocks growing top-line and bottom-line:
When someone asked whether Raamdeo was concerned about the slow growth in the GDP, he cited Britannia Industries as an example of a stock that is consistently growing its top-line and bottom-line despite the adversities in the economy. He also pointed out that there are several sectors which are growing at a steady pace, such as Aviation and Housing Finance. Buying the leaders in these sectors is a sensible investment strategy, he advised.
(iv) Remember there is a direct co-relation between the earnings of a stock and its stock price:
Raamdeo Agrawal took a leaf from Peter Lynch’s advice that investors should look for stocks growing their EPS at a rapid pace because there is a direct co-relation between the EPS and the stock price. Peter Lynch had cited the example of Coca-Cola. Raamdeo cited the example of Infosys where the EPS has grown 45% CAGR and the stock price has kept pace and given an astronomical return of 6000x.
(v) Adopt a “portfolio” approach. Don’t obsess over losses in individual stocks:
Raamdeo pointed out that investors are getting very agitated about losses in individual stocks like Indigo etc. He explained that this is a fallacious approach. He cited the example of how he had bought Financial Technologies and lost nearly 90% of his investment. However, he also bought Eicher Motors which multiplied 4x in the same period. The result is that the portfolio as a whole gave handsome gains.
(vi) Keep the portfolio diversified:
As a corollary to the point of how one should adopt a ‘portfolio’ approach, Raamdeo advised investors to be diversified with a limit of 5% to 8% for each stock. This way, if any stock suffers a melt-down, its loss will be absorbed by the other stocks in the portfolio.
(vii) India will become a $10 trillion economy by 2030 – It is a once-in-a-lifetime opportunity for investors to make tons of money on the way:
Raamdeo explained that it took 60 years for the Country to become a trillion dollar economy in 2007. It took another 7 years to become a 2 trillion dollar economy. By the next fifteen years, India will become a 10 trillion dollar economy, he said.
“This is a once-in-a-lifetime journey and we have a leader who will take us there” Raamdeo exclaimed. “This journey will happen even if Rahul Baba is there. Nobody can stop it” he added.
Very generous person to follow in investment world
Raamdeo Agrawal like any other anchor investors or TV channel advisors giving free advise on stock in which they have vested intersts. Following such “analysts” will loose hard earned money of retail investors and of course we are in a bear market and do not ever follow such useless calls
I think Modi was last political hope ,which Modi himself has dashed down along with some states leaders like non performer chief ministers of Haryana who had divided his state on caste lines and burnt the leading state to ashes.I fear long era of third and fourth khicdi front govts ,although no doubt investing in good stocks at beaten down stocks is good idea, but I fear time of good returns in India may be coming to an end.All this started in last two years of UPA ,but public experiment with Modi give some temporary hope but Devi Devta are being discussed in parliment ,country has been unfortunate in failure of Modi .With expected lack luster budget and with any decision to introduce long term capital gain or not doing something for industry may be end game of the era.I wish I am wrong.
There are many out of work forces who are acting as roadblocks to progress for their self interest to remain in the recognition.People of the country are smart enough to look through their designs and frustrations for being routed and without power.Understandably so.Carry On India with the good and able leadership of our PM
Comment made about Rahul baba is in bad taste. The current political mess is not created by Rahul baba, but created by the current govt which does not have talented ministers.
Did you hear what MMS said on GST? If BJP does not respect Rahul and Sonia, they should forget GST. Is he an ex-PM or a roadside goon holding the country to ransom unless his Mafia bosses are given their cut?
using street language is not good for any one even if you oppose others views
Agreed with Raju. During UPA, there was an able government but no PM. BUt in NDA, we might have a decent PM but not an able government.
India is going to be big there is no doubt about that…however one needs to select right stocks to gain the max. Click on my pic for such ideas…
Sorry Raamdeo baba, we have heard this for pretty long, and in pretty the same way, our political masters have repeatedly ruined our country. In 1992, on top of Harshad Mehta, a couple of bigwigs (wont name them) appeared on the scene and gave a similar lecture saying some specific stocks like ACC, Century Enka, Reliance etc will grow in some 100X or more times. What has given the country its fair share of earning and reputation were stocks that appeared on the same much later, like the Infosys, TCS and all, who did so, despite the government controls. Perhaps it took the government some time to understand what these companies were actually doing (so we were fortunate that they could not be curtailed)!
Before you want our stock markets to make money for us, first get down to the streets and stop these politicians from ruining the country. So much was said about NaMo changing the country, Sri Sri Ravishankarji even went to the extent of predicting Indian rupee will go to Rs 40 per dollar! In reality, what has happened? Keep your mind on your heart and say if NaMo and his team has delivered? Thanks to some well known and biased people being placed in autonomous bodies like CAG etc, the scams are being suppressed.
For example, Gadkariji is on a spending spree (Jaitleyji is giving him the authority to spend), but is every rupee sanctioned and approved going into the highways? Who is looking at the accountability aspect?
A good minister of railways is trying hard at the highest level, but isnt the railways administration continuing the same way as before? There is no coordination between the NHAI, Indian Railways, state govts and city administrations due to which several bottlenecks that existed through railway crossings are still seen in mega developed cities like Bangalore, Hyderabad, Mumbai, Chennai, Kolkata (leave out the plight in small towns).
If Rahul baba were to come (dont worry and thank God, he wont!) it will be a certain disaster. But NaMo or his equally inefficient BJP continuing will not be good either.
We need a truly people’s government where People will have an opportunity to drive the policies of the state towards true development – and not the politicians alone sitting inside comfy sansad bhawan. The moment majority of Indians start asking for accountability from their government and leaders, India will develop. Question is, when? Can we do that?
lol never knew of the art of living guru’s interest in forex predictions, God Save India from these Godmen
btw democracy is overrated and freedom is a myth
they control every damn thing
To make 10 Trillion $ economy from 2 Trillion, our GDP needs to grow around 11-12% CAGR. Seeing the present political and economic scenario, this seems to be a far cry. I have lot of respect for Mr Ramdeo Agarwal, but I think he is little too ambitious in his GDP target. I would put this figure at around 6 Trillion $.
What congress doing now with GST is the same thing BJP was doing when they were in opposition. So, Mr. Ramdeo Agarwal..then also you shouted like this way calling NAMO as ‘Modibaba’??….this type of language not at all expected from a person like you.Opposition will do their job …will play their destructive role as usual…but people in power have to tackle and overcome that….this is their challenges to be won….that will only prove their capability. …and till date, Modi is a big failure in that scenario. ..no doubt about that….
When you know about the history of politics by congress you will not talk like that. First of all we are at the receiving end of political mess better to do our job instead of getting involved in war of words within ourselves.
Rahul is Baba or Dada does not matter to Raamdeo Agrawal, for sure Raamdeo Agrawal’s statements are with intollerance and frustation from his capital loss.
Raamdeo Agrawal always had his own vested interests and we are in the begining of bear market. So investors do not follow such baba or gurus
I am a firm believer in India’s long term growth potential. But still, it is over-exaggeration by Mr. Ramdeo. Does he know that from 2 to 10 trln dollars in 15 years our GDP has to grow at Cagr 11.33% ? That is purely in fantasy zone. Get your numbers right sir.