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Late is not right and late is not right, there is no formula in business, this is what Rakesh Bhaiya also used to tell us, stock price is low, people feel that if they have made so much money then there must be some formula, this is not a formula, friend, it is luck and he used to define luck in a different way, you Bhaiya used to come to our office, even today there is a temple there, big believer of God and elders, so he used to define luck and above our temple it is written with God's grace and elders' blessings, that is the same thing friend, I am thinking, so Bhaiya had a very unique thing, suppose you are Bhaiya's friend, you Bhaiya had your own room, all the terminals were installed, he was watching and you will come and say Rakesh what do you want to buy and suppose at that time Bhaiya was investing in Lupin, this is a real story, I am buying Lupin, if you want to buy, take it, you can go and buy it, I once asked Bhaiya, a CFO of Kalka had come, he told the exact same story, Bhaiya was buying Lupin I asked him, "Take Lupin, I was a little ticking back.
You're buying. Why are you telling him to buy?" Prashant. If my buying increased the stock price, this market would n't be here. Who am I, nothing to this market? Lupin's stock price will only increase if the company's performance improves. I have a view that probably the performance will be better.
I'm taking my own risk behind the stock. He's taking his own risk. If Lupin's stock price increases, I have zero hand in it. Deshbandhu Gupta and his daughters have done all the work. I was lucky that I took a point of view on them. This guy was lucky that I told him that the risk is his, even if he does n't, so what I'm trying to tell you is that he used to consistently try to explain to us that in any business, you always used to tell us one thing: you invest in the realm of possibilities.
Here's the flip question. So, then how did Rakesh Najan become such a big brand? Okay, because if his money Nothing is happening in the market by putting in money, according to what you are saying, I don't know if it happens or not, okay, then they are saying that nothing happens by their putting in their information, they do n't have any formula, how many people have earned more money than what they earned, correct, but they did not become such a big brand, correct, there are many people who will be kings and queens in the stock market, who earned crores of rupees by manipulating at their own level, not by manipulating, but by genuine luck, what ever, and they probably earned more money than Rakesh Jhunjhunwala sir, it is possible, they did not become such a brand, how did just one brand become so big in India, because there was only one person who speaks for himself, he used to wear his heart up his sleeve, I mean, even today, probably our Prime Minister would be more bullish on India than him, but otherwise, I have not seen a bigger bull than him on India, his thinking about where the country will grow, secondly, he was thinking that to grow the country The capital market is crucial for growing our GDP.
What is the difference between capital allocation between India and China? In India, the capital markets allocate capital. If you are efficient, you will get money. If I am inefficient, I will not. In China, because it is an autocracy. The state allocates capital. So, it makes no difference. That is why China's banks are in trouble.
Indian companies, which are our top 100 companies in Nifty, have the highest RO among any companies in the world. Because the market is allocating capital, if you are efficient, you will get capital. You will start becoming more efficient. Bhaiya, would go and educate Indian investors? He was the first person who would go on CNBC and he would talk about India's structural story.
Why everybody should believe in India? Why everybody should talk about why everybody should invest in Indian stock markets? And he used to tell people that investing is not a part-time job, it's a full-time job. Time is profession, so don't run after tips, tips are the way to wealth, sorry be a long term investor, don't you invest your capital, give it to mutual fund guys, those professionals, they know how to make wealth, your question is right, so Bhaiya has two business models, one is trading, his capital was made from trading, his wealth was made from investing, among the very very few people I have seen in my life who can build a wall between trading and investing, if you come to our office, then we have 10 commandments of trading, Bhaiya and 10 commandments are of investing, they are not formulaic commandments, so when he trades, his mindset is different, he never does day trading and never does week trading and he does not buy Nifty today to sell tomorrow, he has a view of Nifty and the view is formed on the basis of country's growth what is happening versus the result, now if you look at Nifty, there are 30 companies in Nifty, the profit of those 30 companies, when you look at Nifty You can calculate EPS.
Nifty trades at a multiple of 1p today. As we are speaking, Nifty is trading at a one- year forward price. Nifty is trading at about 18 times 25. Now, in Nifty, the market cap of each company is given a weightage. Financials has a weightage of 35, Consumer has a weightage of 18. For example, they used to study the balance sheets of each Nifty 30 company.
Sorry, what should I say today? Bhaiya, no, Bhaiya, you can ask about the P&L balance sheets and cash flows of Nifty 30 companies. Here, we were eight people in research. We used to study Rakesh Bhaiya for more than eight people every day. Okay, now on a basis, all the macro information coming out is starting to make a view, friend.
And secondly, he used to tell me, Prashant, take me to any country and sit me in front of the screen, we will make money. Because as a trader, we never trade on opinion, we trade basis price. The difference is that when they look at the screen, you can see what volume is happening, which stock is increasing, whether it is increasing or decreasing with the volume.
You are taking your decision based on the sentiments of the market which are reflecting the volume. They never trade on the basis of whether I am right or wrong, if I take my point of view and the market tells me that my point of view is wrong, then we tighten the stop loss. So the first commandment of trading was that you trade based on price, not based on opinion.
Your first loss is your best loss. We never confused trading with investing. Be it Rakesh Jajnawala, Radha Kishan Damani, Ramdev Agarwal or Nim Shah, I learned one thing from all of them which we could not implement. There are very few decadal compounding stories in the world. You will see someone growing for 5 years, growing for 7 years, but if you match the decade compounding of 15-20% for 40 years, you will be shocked.
I had the wisdom to know that if I get a compounding story then I should not sell it because I will get only one or two such opportunities in life. If you want to see more such insightful shorts and clips then subscribe to this channel.
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