저자: RaamdeoAgrawal · 외국인
요약 보기
결론: 라므데오 아그라왈은 인도 시장의 장기 복리 성장을 낙관하며 향후 약 5~6년 내 두 배, 10년 단위로는 더 정확한 방향성을 보지만 단기 등락과 변동성은 피할 수 없다고 본다. [인도 시장 장기 전망] 인도는 경제 성장이 주식시장 성과로 이어지는 몇 안 되는 시장(미국·중국·인도 등) 중 하나이며, 인도 시장은 미국보다 더 예측 가능하다고 주장한다. 명목 달러 GDP 성장률은 약 9.5% 수준으로 본다. 1인당 GDP 2만5천달러에서 1만달러 수준으로의 4배 성장 가능성을 높게 본다(미국 1인당 10만~20만달러 도달 가능성은 불확실). [센섹스 목표] 현재 8만포인트 수준 기준으로 5~6년 내 두 배인 16만포인트 가능성을 언급하며, 장기 평균 연 15% 복리를 근거로 한다. 단기 예측이 아니라 방향성이며, 과거 45년간 연간 15%를 달성한 해는 없다고 인정한다. 과거 1년은 약 7~8% 수준이었다. 10년 기준으로 더 근접할 것이라 본다. [시장 사이클과 대응] Y2K 버블 때 인포시스 등 소규모 비중(약 2.5%)만 투자했다가 이후 폭락을 겪었고, 2008년 전후 은행주 보유로 최대 67% 낙폭을 경험했다. 시장 고점·저점을 맞추는 것은 불가능하다고 보며, 첫 30%의 상승은 예고 없이 나오므로 저점 매수 회피는 투자자의 실수라고 강조한다. 지나친 수익률(연 25~30%)은 지속 불가능하다고 경고한다. [기업 선별 기준] 재무지표(ROE, 현금 회전율, 운전자본 등 23개 비율)와 복리 성장 기업에 집중한다. 은행 등 인도 성장 산업을 선택하고, 장기 보유를 원칙으로 한다. 저평가 후 10년 이상 주가가 움직이지 않았던 종목도 가치 상승을 기다려 성과를 냈다고 밝힌다. [가치 vs 가격] 모두가 가격은 알지만 가치는 모른다. 가치와 가격의 격차가 비대칭적 수익의 원천이며, 프로모터가 가장 많은 부를 얻는다고 본다. [출연자 기타 발언] 개인 투자자는 직접 투자보다 펀드 매니저에 맡기는 것도 방법이라 언급. 투자 전 최소 3권 독서를 권하며 Phil Fisher 'Common Stocks and Uncommon Profits', Buffett 관련 'Snowball', Michael Porter의 프레임워크를 제시한다. 복리 사고를 자녀에게 가르쳤다고 한다. [리스크] 지정학적 리스크는 항상 존재하며, 전쟁·분쟁 등 충격은 주기적으로 온다고 본다. [언급 종목] 특정 대상 자산(삼성전자·SK하이닉스 등 목록 종목)에 대한 직접 언급은 없음. 센섹스 및 인도 시장 전반에 대한 장기 낙관.
다듬은 글
Not buying at bottom is a crime for an investor if at all you are timing the market because the first 30% comes literally without giving notice only after 30 40% has come in the market then you realize that boss market is reversing but by the time you take your courage and go in you lost 40%. So so there is no scenario like we've seen in Japan to some extent in China where the economy is growing really well but the market return is
uh that is a key thing actually uh there are very few countries where economic development translates into stock market performance it's only US and India so there are 170 markets but only two markets are magical for extraolation that is China uh US and India we are very lucky to be in India in fact India is far more predictable than US also key financial ratios I straight go there and see 23 ratios Say if you are a consumer company you are selling say diapers and diapers you're saying 1,000 crores worth of diapers you are selling but are you getting your money back from the system in 10 days 5 days or 50 days 90 days now you are as profitable as me I collect my money on the same day and you collect after 100 days that makes a huge difference in my mind high roe with a very strong terms of trade that gives me that boss it looks solid when the hashamea collapse happened because we were young that time and suddenly markets were closed and market crashed and you know the headlines were there we were also impacted but that time my draw down was 67%.
And I had all the bank shares in my portfolio. So I went where that actually the explosion happened. See what is the crisis in the market. Everybody knows the price. Nobody knows the value. So I have to find my way of finding value. And once you have mastered that formula for value, then game is very simple.
Price is given to you. Is the return gap between price and value. Is it asymmetric? We are looking for asymmetric. That's the excitement of the market. Portfolios went up by not 7x. It went up by 20x, 30x. So much of froth in the whole thing. and then it collapsed. You know it is going to collapse because when your returns are 25 30% across the portfolio obviously it is unnatural.
It is just not going to stick. It is going to go. Three books every investor should read. A very warm welcome to a brand new episode. I'm Radhika Baj. Our guest today is an icon of icons. Truly a pioneer when it comes to shaping India's equity culture. So let's not waste any more time because we have so much to learn from him.
Let me introduce to you Mr. Ramdio Agarval, co-founder of Motilal Oswal financial services and of course the creator of the iconic wealth creation studies. Thank you so much for joining us on grow sir. It's such a privilege to have you with us. You're a champion for Indian markets. You're very optimistic.
In fact, I think in a recent interview, you set a target of three lakhs for the BSC Sensex, I think CGR of 14%. But if you look at the past year, we've looked at only about 7 8%. So why did you give that figure or why is that target? Yeah. So you know what happens is when you go from here to Pune, it's a 300 km.
Your car goes between 0 to 120 uh speed per hour. What is the yield received in 3 hours? Ultimately, it will take 3 hours to reach 180 km. Just because your car can go up to 120 or 130, you'll not reach in 2 hours or 2 and 1/2 hours or 1 and a half. Actually, if you if you drive from here at 120, you should reach in one and a half hours.
Will you reach in 1 and 1/2 hours? No. There are toes, there are there are crowds, there are whole lot of things. So, your car moves between 0 to 120. In the stock market, market doesn't move at 0 to 120. market moves between minus5 or minus30 to + 8085. So average works out to be 15. I hope I'm understood.
I got it. You know so every day is not see in the uh like there is probably no year in last 45 years when it has done 15%. But average is 15%. Correct. And that's what I'm saying in 5 years we will double if not 5 years 6 years. That's a compounding. So what will happen is that uh okay right now at 80,000 will be 160.
So I said 150 keeping 10,000 in mind uh this margin so it could be 170 then also I'm barely right and if it is 130 135 then also I'm barely right it see 150 doesn't mean 150. You're averaging it out directionally I'm saying and I'll be far more wrong in five year basis but on 10 year basis I'll be far more closer.
So there is no scenario like we've seen in Japan to some extent in China where the economy is growing really well but the market return is that that that is a key thing actually uh there are very few countries where economic development translates into stock market performance that is there are some guy was telling me it's only US and India so there are 170 markets but only two markets are magical for extraolation that is China uh US and India we are very lucky to be in India in fact India is far more predictable than US also Maybe you might US on a block tob block basis might have done they have a strong currency so it might have done as well even with a weaker currency also we have done almost matching in last year basis 11 12% dollar uh market performance I have got which is what even DA has done but with lots of draw down and all here it's far more smoother and far more predictable America to go from $90,000 per capita uh uh even in 20 to go to two lakhs dollar per capita.
I'm not too sure. It might happen, but I'm not too sure. But I'm reasonably sure that from $25,000 per capita to $10,000 per capita, there is 4x in next 15 years or 17 years that I'm the probability of that is much higher. There's nothing no certainty in this thing because the momentum is very high.
We are talking about 9 9 and a half% dollar GDP growth rate. See you keep doing 6% 6 and a half% 7%. That is only in the inflation adjusted real GDP growth rate. But actually if you look at the global economy then you look at the nominal dollar. Nominal dollar will be growing at about 9 and a half%.
But you don't feel that the kind of geopolitical twists and turns we are seeing they will have an impact on they're always there. They're always there. They're always there. It's not that we didn't have our share of geopolitical troubles in 2002 or 2005 or 2009. they come from some somewhere it comes.
I mean like 3 years back it was looking that uh is there any relevance of uh is there any relevance of defense at all worldwide there was no war I mean people are just producing and piling it up and all today it looks there's a acute shortage of arms and ammunitions there three three actually international war running for 3 years Ukraine war is on for more than two I think almost 3 years now there's so much of defense activity suddenly so these are all bouts of trouble maybe after four five years you might see again 10 15 years of peace.
Okay. So you know going back you've seen so many market cycles bull runs bare runs all of it right to the extent that there were times when you were looking at 50% draw downs right uh what was your mindset at that point and can you cite examples where you thought the market behaved irrationally longer than you had expected?
See what happens is that you enjoy the party. See what happened like what I distinctly remember is the uh the 20023 you know what happened was that there was a Y2K I mean the world was because it was the the entire market didn't fly it was all the techdriven the first flush of tech worldwide that was Y2K in 2000 so uh at that time I had started going to US meeting Buffett and all so I was I was knowing that excess is happening at that time Buffett also announced that excess happened the world was knowing that is happening but nobody know how it will come to an end and then it came to an end okay in 2000.
So that time we got notice of the the boom coming to an end whether whether we got 3 months notice or 6 months that was a different thing but we I could see it coming to an end so I could kind of a precautionary step I could I could sell something that that itself is a different story. uh so uh and then after that there was a depression for a year or two in 2002 3 and then the bullan again built up from 2003 to 2007 which is mother of all the bull runs market exponent 7x in 5 years I mean you could again see the excesses coming and it sustained for a very long time portfolios went up by not 7x it went up by 20x 30x so much of uh froth in the whole thing and then it collapsed you know so you know it is more collapse Because when your returns are 25 30% across the portfolio obviously it is unnatural it is not going like it is just not going to stick it is going to go uh when how I don't know but it is going to go but what to do so the issue is that should you sell early say instead of 21,000 I come to know at even 17,000 that market is excessively done let me sit on the cash
but everyday morning you come here stock is up 500,000 points. How do you I mean uh how do you live that also because you don't know looking back you know 21 but if it had gone to 25 or 30 then then you you are sitting on the side and train is just running away. So you know at least I didn't do that.
I was very clear I will sit in the market and uh even get burnt while it goes down. And that's what I did every time because what happens is that of course you pay the price of uh correction but the the nature of the market is so complex that you cannot get the top as well as bottom. Okay. So even if I get the so I I cannot get the top.
So if instead of 21 if I sell out at 17 so I miss the top for 4,000. Yeah. Okay. Now 4,000 I didn't sell. I sold at 17. Then the market comes down to say uh again something like say 50% correction. So again 10,000. No at 10,000 to become insightful that now it is going to go to 80,000. I mean I'm not God.
And you've lived through these situations right? Whether it was mastec or emphasis. What happens is that uh the particularly not buying at bottom is a crime for an investor if at all you're timing the market because the first 30% comes literally without giving notice. Only after 30 40% has come in the market then you realize that boss market is reversing but by the time you take your courage and go in you lost 40%.
So basically I'm I mean with all this effort successfully I'll make between 14 to 17 that's about 3,000 bucks. So what is the point in all this trouble and full day I'll be bitting my head. So I said boss is not my cup of tea. Stay away. But one thing you did differently at the time was that around that Y2K uh period you made very sizable allocations.
It is not allocation. Allocation was 2 and a half%. That the whole damn thing grew by 10 12 times in 2 years time. I allocated 2 and a half. I could have never allocated 40%. I didn't have that kind of guts to allocate like that. And see it also depends on the insights. The size of insight. I was intensely what do you call convinced about Infosys and Y2K story but not enough to allocate 40%.
So I allocated 2 and a half% but uh uh the stock grew I think 12 or 13 times and rest all didn't move. The beauty is that other non- tech portfolio say HL Hero Motorc all those actually came down. So what happened was your two and a half became say 30 or something but other 70 that came to 50. So overall it became 40 60 types.
So you know it was it was a crazy kind of a bull run. It's very interesting. So when you exited emphasis you exited did you feel like there was scope to hold on to it? No no no that was a when I start selling I sell out of conviction. So there's no problem there's no point in I I never had any problem looking back.
know that uh it is going go up by five no that was not the issue and it didn't happen also so I didn't have that problem the problem was what money I got say I must have got 30 35 crores that I went at after uh after fall of the market by 20 30% I went and bought some other cheap tech company I mean I sold say 50p I bought something at 15p and that 15p has disappeared there's no earnings only now so the stock has become zero so my entire 35 crores which I had saved the best was I I should have been sitting on the cash and whenever the tide turns I should have bought no uh what I did I I went and bought some other company and that became zero so my 35 crores also became zero
there are two very interesting things here I think a lot of us struggle of course to buy we do our research but we can't time well when to sell see once your money is doubled 10 times eight times you sell but greed sir no that that is where you have to have control. So okay and you buy good company.
So even if the stock keeps coming up and down uh you are you are still stuck you are still having only 100 crores worth of portfolio. There's no challenge of you know borrowing some from somebody returning. No, I have my money and I can afford to see a prices lower because I have not only seen 50% decline.
I think the real pain is for 10 years stock doesn't move. But you've been in situations where the stock hasn't moved. You've still held on to it. I think Honda is Yeah. No, not Hiro worked from day one. Day one it started working. What didn't work is a company called Maharashtra Scooter. Uh I'm holding for 21 years now.
Still I've got all the I don't even know what to say because a lot of us will not have the patience. That's where I'm saying that's what so between 2003 to 2013 the stock didn't do anything. Why are you holding on to it? Because I bought it 60% discount. I bought uh 1,000 cr uh company for 300 crores or 400 crores something like that.
There was 60% discount. The discount went to 92%. The value kept on growing but uh the price didn't move. So I said I'm not going to sell till the I get fair price and that patience paid. So patience al see in stock market what happens is that I think the you need to have patience yes but you got to wait under right tree you know if you if you're if you're if you have patience but you uh your the company underlying company is junk in that case you wait for the whole life the junk will remain junk you know you have to have prosper companies which are going to prosper you to share in the prosperity you have to sit for long time because even the companies don't prosper overnight this moments look to be very crazy you know but it takes lot of I know I'm I'm building this company it has taken me how many years now 87 to now almost 40 years 37 38 years to reach here maybe we are very slow or maybe first 10 15 years went because 0 to 0 to a cr itself took about 5 6 years and uh 10 crores took 12 13 years and now things are much faster But uh it takes a lot of time to but once you get a good company which is compounded company see there will be very few compounded companies when you come across them then you need to bring the patience.
Now the the issue is how do you judge whether it is a compounded story or it is one of his story. Yes. How do we judge? Yes. That's where the I think some kind of a maybe skill or your experiences uh knowledge of see first thing is the country itself is compounded. So you are already blessed from the top.
This country will keep moving at 6%. So it's a band of six to eight. It will keep moving. Now in that kind of a umbrella which are the businesses, which are the industries which is kind of a like banking without banking you cannot have 8% growth. Now once you have decided on that then within banking there are tiger banks and there are I mean everywhere you'll find uh duffers and they'll find the growers.
So you have to align within that a bank which you know right from uh right from uh this ground up that this bank is going to grow like HDFC I was very clear from 95 that boss bank I didn't know it is going to this big but I was very clear so that's how you know you got to have an eye for compound compounding machine that is the real thing in investing that you got to learn right from the early that there is a difference between uh what I would say uh a stock which is good for a trade you know you buy at 100 bucks and goes to 200 and get out and never remember them again and second you buy at 100 and wait for a lakh rupees to come but it is going to take time 10 15 20 years and then you should have that uh say like some of the like the insurance companies insurance industries perpetual industries I mean there's no alternative to but uh I mean when to buy which company to buy and then sit on with with which company that you have to decide so that's where the stock picking comes as a skill
there were times when there was information asymmetry right there was not a lot of information available versus now where there is so much data there is so much research and and it's accessible to everyone right so how much do you rely on instinct now versus what you see factually in terms of the data was always there the issue is accessibility of the data was a little slower particularly after 85 Once the Cine came once the databases started coming early stage slow it was and little but uh then after that I think the gap for people like us were very very less I mean we always invested with open mind but when I started my career in 85 87 there were huge gap uh I mean reading balance sheet and nobody was reading balance sheet so today that is the kind of uh that gap is gone that information symmetry is gone a lot of arbitrage has happened but I think if you're investing for 10, 15, 20 years, there is absolutely no competition.
In fact, unfortunately, as the data has become rich, see businesses, businesses have become as long, as prosperous as past. Okay? Today, if there is anything, uh the businesses will grow much faster, much better because now technology is there, internet is there, internet businesses will grow at 2 to 3x faster than the uh what do you call old economy.
But the patience is missing. Somehow it has taken away the patience uh because there are too many people who are who are new to the game. Out of 200 million demat accounts one60 million is less than 5 years. They have no clue what they buying selling both postcoid. Yeah. Postcoid. So uh so the market is very impatient and not only in India worldwide the holding period is coming down.
Average holding used to be say one and a half two years now it has come down to less than few months uh kind of thing. So investing culture is not being propagated. Trading culture is being taught in the schools and uh all the option theories are being taught in the schools. Value investing is uh in some places yes but not so much.
So the uh so what is the need is that there has to be a good balance between trading and investing. So while you are giving all this what do you call the props they love to make the markets mathematical which it is not you know they want to explain all the mments and everything by formula some calculus and all and that's how the kids are young minds they are fed with they're not being uh drilled into value investing you know so and not only in India in US in some universities yes in Cambridge uh Colombia and all they have the very good props who are teaching uh value investing But now if we are a $56 trillion market and we're heading towards 10 15 20 trillion market we got to bring this uh subjects uh right in the front of uh uh all the courses and academia.
Is there any space for an instinct or a gut in picking stocks now? Of course, it is. The game is same. The game is same. It's no different. It's no different because that's where it makes a difference how much to allocate. The same data is able to you same data is herable to me. First thing is how much work you are willing to put, how much work I'm willing to put.
The guy who is not running the business, he has no idea what drives what is the value of the company. See what is the crisis in the market. Everybody knows the price. Nobody knows the value. Okay. I mean that's why all the guys like us who are their main library main workshop is these library these library books and all who is going to read 200 300 books here you know very not only just reading but actually assimilating and finding your way of finding value you know gurus have given say buffet says how he he estimates value mathematically also but ultimately I have to I'm not buffett I have to find my way because my circumcisions are different my companies are So I have to find my way of finding value and once you have mastered that formula for value then game is very simple price is given to you is the return gap between price and value is it asymmetric we are looking for asymmetric asymmetricity in the return that's the excitement of the market you buy it say like as I'm saying that any company like you stay for 20 30 years and it goes 100x 1,000x I mean that is not possible in the fixed income or any other way even mutual fund is not possible so that assim metric return is the real magic uh for anybody to I must have spent in Maharash 6 7 crores now it is worth 250 crores and I get div of three 3 crores 4 crores and then what happens is finally these stocks are not by the outsiders these stocks are owned by the promoters and that's why the maximum money in stock market is not made by jokers like us it is made by the promoters of a successful company because they are here you know I mean all the all the money is uh is being enjoyed by the promoters in world war who is the richest guy Elon Musk uh Larry Ellison or I mean these are the guys they're promoters they're not punters
yeah that's very interesting so you know you spoke about asking the right questions to management so if I take you back many many years and talk about AU financers what were the questions you asked them when You made your 20 cr investment for a 30% stake which you later sold for 5,000 crores. What were the kind of questions you were asking them?
See that time see early stage very very early stage they were kind of maybe four five years into the game of lending and all. So that time what is important is not the business business very small the person is more important. See what happens is that as the business becomes bigger the importance of an individual goes down and importance of uh how the business is structured and what is the underlying economics of the business those things matter a lot but when the business is very small then who is doing the business that is more important because the business at early stage needs lot of tweaking you just started uh like we said Mudlo as subroker like subroker is like not even a fly in the system even at that point of time you know we were like useless fellows.
But from there to create this company. So you know that thing has happened not because of the underlying business. It has happened because of us me and Moti and our team working day in day out. These things are possible. So that time you will judge the vision, the courage, the passion, integrity and uh ferocity with which the entrepreneur is going to pursue his objective of making money or building an enterprise.
And that's what I saw in management of EU at that point of time. I didn't know it is going to become a lac cran or something like that. We were buying for 50 crores. For us, if it had become 500 crores also, it was a damn good uh issue. It turned out to be 5,000 crores in our 10 years between 2000 2007 to 2016 or 17 it became uh 5,000 crores.
Okay. So when we talk about motil oval some strong returns have already been you given to investors in very recent times and portfolios it seems have stayed away from some of the sectors like financials metals cement uh large cap IT as well uh what's the rationale behind this sort of sectoral positioning
but I don't want to get into that because they uh it's being managed I'm chairman of the AMC but uh they have their own you know choices is the fund manager they make a choice the CIO contributes so they have their own theme so every fund manager has a choice to but do you have a broad view on u yeah so the investment philosophy is same QGP now they have given a little further twist to that they are saying that in Q&G they will go for high quality and high growth see there is a theme uh grow fast and die slow okay so you know when index does 15% uh out of that 50 companies is 25 are growing fast.
So they are delivering 25%. But other 25 they keep dragging that 25 companies to make it 15 as I said about the average. So uh we are saying that we will be aligned more with our effort on the top side rather than bottom side you know we we are not going to be like mix of 37 38 companies we'll be more we much more focused but more on the uh high growth high high quality high growth kind of thing.
So those things so a lot of these sectors they have not shown the characterist of high quality high growth either the quality is not good or growth is not good. It has to be both. Okay. So now you know you've seen one churn when it came to technology uh in the 2000s early 2000s and there's another churn happening now which is thanks to AI.
So looking forward 10 years uh how much weight are you envisioning allocating to internet first or new age businesses or AI reliant business? I'm yet to get a grip of this AI thing. You know, something somebody will teach me. I'm trying very hard to understand the impact of this and how what is the business model for AI and is it the existing businesses uh will exploit AI a lot more or uh will there be a set of new business altogether like Y2K give a buzz to the whole lot of services companies like Infosys, TCS, Vipro and all.
So is there going to be new set of AI compute or AIdriven companies or will there be will it be a kind of a add-on to say mudwar is doing broking so all kinds of customer service whole lot of processing and all can be done with the help of AI in a better way so is it going to be something like that so it will be add-on services to the current services companies you know the it will be actually provided AI AI chatboard or AI agents will be provided actually the um employees of Infosys and TCS they might become AI agents working being to be hired by uh running corporations like us or global corporations.
So let's see I mean in what shape it comes out. Okay. You know u it seems that you also use chat GPT you use AI for your wealth creation studies. So uh what surprising theme or pattern did you find that perhaps a human may not have been able to pick? Yeah I mean like uh to find the sources of growth sources of this that I mean one place to write I mean even if I had read 10 books I would have not be able to write the way they can write it.
So uh I mean you should also be smart in asking the right questions uh so that Jenny can come and help you but uh I think it's particular on the LM side in the this chat GPT I think they have done wonderful thing I'm yet learning how to exploit the power of it but yes I mean like if you see the Q&A 2 hours Q&A of uh anybody like what we are doing right now I mean you put the whole thing in one place and it will give in thousand words all the discussions we had in summary of that you it can call out all the meaty points and give a summary.
So that is the power of uh AI. So when I'm going and meeting a management or customer I have I I'm extremely well informed about the company you know because what company has made a public announcements again going and asking is like making a fool of yourself. So let's be on top of it which takes like half an hour or 45 minutes on the way only you can be on top of it and then you can then you can actually prop the company or the management onto completely new sphere of you know what you want to understand.
So you know we've seen a trend that uh there are unlisted shares being picked up by family offices. So there are large family offices. Now are there also pockets in the public markets where we can get that kind of value? Today value is always there. In fact, the public market is the biggest place where you'll get values.
In private market, you'll not get the shares unless you know most of the deals will be on the bullish side and say that when the companies are doing well, then only you go and buy uh uh you know kind of unlisted share. Say NS is doing very well. So there will be lot of trade off 50 60% of the value traded in unlisted is all NSE.
In fact, NSE trade has uh what do you call galvanized the entire unlisted uh market actually if you ask me. uh otherwise before that I don't think there was a much of uh talk about even unlisted market but the beauty of the public market is that you know the company and the company could be in trouble for a quarter but market will punish it as if it's end of the company and that's where the broken blue chips you know brewish blue chips I mean a great business in bad time you can get it for 50% of the price or uh 30% of the price so this is a crazy market because nobody Nobody knows the value.
They're scared of the price movement. So the the moment price starts going against somebody say I bought something at 1,000 and the stock goes to 950 or 900. He has no business but to sell. Okay. Now news comes news is bad for the quarter. Then it hits 600. Okay. What was 2,000 has become 600. Now at 600 somebody understand the underlying value.
He goes and picks up everything. Because at 600 also when there is a loss in the company why somebody's buying because he knows underlying value is much more at 600 he buys a 600 next quarter the profit comes to again 1,000 crores stock goes to 2,000 rupees again so this gain is possible only in listed market not so much in unlisted
you're meeting a lot of young entrepreneurs uh and you're investing in companies right u I want to understand what are the sectors that you are uh focus focusing on or is there a list that you have that I want to be invested in companies that are working in certain sectors? No, I'm not that that much.
I'm willing to look at any company interesting story, you know, interesting entrepreneur, interesting business, a business. I mean my my thing is uh I expect 25% return on equity com businesses which are delivering 25% ROE or has potential to deliver 25% RO and at least 25% growth for next 10 15 20 years when I mean who knows whether they're going to deliver that or not but when I fantasize that kind of a story or I come across that kind of a story then we look at the valuation whether it is at reasonable price 15 17 in P multiple something like that.
So I mean that's my sweet spot but uh I mean in this kind of a market slightly it is not able to you are not able to find so many ideas uh good business good management high growth the price is not reasonable so that makes the life little more uh what do you call challenging your portfolio is doing very well good thing is that I don't have money flowing into me the company has but personally except for dividend I don't have much uh any other uh and whatever I have that is all being invested.
So I have to sell something to buy absolutely new ideas. That's why I'm not in hurry to get a new idea every day. If I get one idea in 3 months, 4 months, even 6 months is good. And if I can get an idea where I can put 50 million, 100 million, then even better. Then I don't have to work too hard. Okay.
I think there are just a few sort of rapid fire questions that I prepared. So what's the one trait that a multibagger stock always has without exception? There's a price value gap. The price has to be so much cheaper than underlying value potential value. Would you rather buy a great business at a fair price or a fair business at a great price today?
Yeah. So as I said 25% I remember it is not a fair business. It has to be a great business. Very good business rather. Very good business at reasonable price. I don't I'm not look I mean if I can get it very cheap of course that's my luck but generally you're not going to get it cheap so I'm looking for great business at reasonable price
in your glorious career what has been your best day at work every day is a great day actually I mean I actually love every day I see my diary at once I get up in the morning I just generally see bumar I'm meeting but today is as good as there are no milestone days that you remember my student days I actually don't I mean except for my CA passing that was a big milestone that changed like a lot of things I mean I crossed the hump kind of thing my you my academic thing was over and I started a journey of uh uh becoming businessman so yeah but u I mean of course you get married and those kind of you get a son so those are the big days but uh generally for the as far as the business side is concerned Every day is a good day.
I mean and actually the best day is a day on which I'm meeting four five very interesting people you know when particularly when I meet a new management or new business of of which I have no idea what are the economics how it is being done say a chipsm company I don't know I've seen only first time a chip chips or I met yesterday a reality company first time I meeting a reality company not that they I could not meet but I never met a reality company but here I was very surprised uh by opportunity.
So I went and met and that was a great so yesterday I remember it was a great day for me. The worst day that you remember in your career? Worst day. I in business- wise. Business. Business wise. Yeah. Some some of the days like when the hashamea collapse happened because we were young that time and suddenly markets were closed and market crashed and you know the headlines were there.
We were also impacted. But that time my draw down was 67%. And I had all the bank shares in my portfolio. So I I I went where that actually the explosion happened. So that was bit uh scary but uh see I was never leveraged. So it it gives psychological the draw down steep draw down gives you that uh you know that uh depressing feeling for few hours but that's it because we I I never walked into a financial trouble.
Never never ever in last whatever 35 40 years of my business we were always clear as far as financially uh it was never an issue business was bad someday we incurred losses uh and this kind of crash happened 92 2008 those are few kind of a bad days even this I was bit shocked the day on which this uh lockdown was announced and I got stuck in uh MB valley of course it was a beautiful place and I had good friends I learned and uh playing golf out there out of this.
So uh but still for a day or two you feel very frustrated. What's the first thing that you notice in a company's annual report? Key financial ratios. I straight go there and see two three ratios uh margin the uh return on equity growth and uh in fact I have quite fascinated by one thing that in how what are the terms of trade like in how many days he collects the money.
Say if you are a consumer company you are selling say diapers and diapers you're saying 1 th000 crores worth of diapers you are selling but are you getting your money back from the system in 10 days 5 days or 50 days 90 days now you are as profitable as me I collect my money on the same day and you collect after 100 days that makes a huge difference in my mind high roe with a very strong terms of trade that gives me that boss it looks solid
fabulous insight Thank you for that. Uh, what is the most overrated metric in investing according to you? P. Why? Because see, oh, it's crazy because if your margin is thin, then P multiple is like literally infinite. And if margin is fat for some reason, extraordinary earnings and all, then P looks low and that gives you sense that it is very cheap company.
No, it might be the most expensive company. So I think uh for that matter any ratio is like uh very risky but P is being used uh like uh almost like a the benchmark for every everything. So you know when you are looking at uh the P particularly when you go to individual stock then it can be very very misleading when you go to index level then it's a very diversified broad it gives a really good sense of where the market is like if it is 22 times uh nifty P that gives some sense what it means for the market but when you say 22 P for a company I don't know what you're talking about
so that's the overrated metric what is the underrated metric in investing price to book nobody looks at balance sheet Very interesting. Which stock has taught you the most about patience? Which this Maharashtra Suda you know and uh impatience is the HDC bank. I sold it in uh you know you must have heard I think it was just about a year or less than a year I borrowed 40 not even a year and I sold it 52 53 because of some information from uh somewhere and information was right by my interpretation was wrong and hence I lost the I had five lakh 50,000 shares then I mean it made that must have been four five% of my portfolio at that point or maybe even bigger so uh that compounding story see when you miss out on a compounding story early stage That's the biggest loss.
I mean to miss out on HDFC bank in 96 I mean when it was 40 bucks from 40 bucks today it is it is uh I don't know how much it is it is maybe 10,000 bucks because uh the price itself is 2,000 there must be multiple splits and right issues and all. So it must be almost like at least 8 10,000. So that kind of thing you missed.
Uh what's been harder for you uh on your investment journey? Is it buying right or sitting tight? I never had like I'm I'm good. I'm happy with what I did you know because you see because it's all circumstances you know when you move so uh I mean for me buying selling is very easy in a sense that once I take this then I'm clear about what and I don't look back if I sold something at 100 and goes to thousand fine I mean like uh we sold I mean I many times you get to see that you are selling something uh underpriced but uh the stocks are held in fund or something you have to close the fund and move on.
So yeah, I mean I have uh I I we sold lot of AU. I mean 30% of AU for on average we might have sold for 2,000 2,500. Today is 60,000. So but I could see it is a compounding machine and yet we sold it. So that's that feels sad but it's part of the deal. I mean that's how the fund is structured. So what's the one investing mistake that taught you more than it lost you?
You know one of one or two mistakes which we committed in the sense that uh you never go with the crook particularly if you know see if you don't know then it's fine when you know this guy doesn't have good value system he's a crook mother certified crook if you know first thing is if you know don't don't do it however cheap it is and if you come to know later after you bought it is quite possible you thought he's an honest guy but turns out to be a croak then you run from there because he's going to go to the hell and he's going to drag view also there.
Uh when you think of IPOs, what's the biggest red flag for you? IPO itself is a red flag IPO about but IPOs people get excited. Yeah. Exact. That's the that's another problem you know I mean till about even now I don't go to any IPO meet. See some of the things are very interesting. See new business new businesses come uh and what is happening in India very funny is that companies are very young very young means they barely make profit any coming see typically what is the journey of a company about 99% of the companies they die out in first 10 years or they get marginalized so they don't remain a company okay they don't exist so 99% company they die out from zero date to first 10 years few companies they scale up.
Okay, those company have the right to go for a public market. So basically successful birth of a company is happens between 10 to 15 years of a company. Okay. When the so those companies are coming to the market at that age or maybe even earlier 9 years, 8 years they're coming. So you are literally getting what what would go to private equity you're getting in public market.
So those newer business models all the digital based uh companies or uh uh typically new business models which are coming up uh in in any field those are interesting to attend and not so much to buy I would still hesitate to buy but to learn the story what's happening there okay so if you had one lak rupees today and you were 20 years old where would you put that money
then one lakh rupee at the age of I mean The age is a problem for right now it is not a problem but at the age of 20 see you don't know anything so I would I would not do one of the best learning I had from Buffett is that don't do anything till you understand and that applies not only to investing more so in investing but every walk of life don't do it just don't do it you'll be very safe at the age of 20 what you don't know uh is that a lot of things so when you see value price gap you you will have a what do you call limited understanding of it small small companies you will find and uh when you do that you enjoy a lot my first company I got the information I mean I could understand the company because the balance sheet and some premier league uh news was given to me by my roommate in the host he was auditing that company so he gave me all the balance sheet and uh what kind of money and all they make I could see that I bought it 15 bucks and uh in a year two years time it became 45 bucks that kind of so you know and I was actually 21 22 at that time 79 80 I was there 22 so those kind of a breaks will happen
okay and one lakh where would you invest it if you were 30 years old 30 years so it all depend see when we started our career we had if you wanted to do investing of your savings there was no way to go to MF and all there was no MF okay I had to do direct stocks but today that is not the issue if I want want to make a career in investing in the sense that I want to learn the game of investing myself or uh I want to become investment professional then you should go to the stock market and figure out what is the value what is the price what is the earnings growth what is the roe what is the momentum this I mean it's a full-time job and it has become very competitive so there are guys the price is determined by the people who know a lot so if you are young and you don't have that much time and edge and passion why to bother about go and give your money to one of the fund managers and be happy with 18 20% return.
Yeah. Do the hard work. Okay. So final couple of questions sir. Um three books every investor should read. Three books. So I would I we always give these books to them. So one is that common stocks uncommon profits by Phil Fisher. That's a classic. Uh second is that uh snowball by of Buffett. So that I'm telling you from my perspective.
I mean people have different philosophies. So they can pick up different books. U so Buffett, Phil Fisher and uh I would suggest more recent book but strategy beyond hockey stick that book is terrific but maybe not for the beginner. Yeah but these are books there are tons of books you know uh you can learn.
See every book will teach you one thing. The beauty of the books is that every prof in US whosoever wrote it they have only one idea and they sell for $25 to you. So you have to grab that idea from the book and move on like Michael Porto he got that five forces right and he's spinning year after year various books and all but you got to get that five forces thing into you and use it everywhere.
So you have to get the frameworks and for getting the frameworks from one book you'll get one or you are lucky you'll get two. So you have to move on and you'll get if you read one book you'll get reference to the next and then next and then I'll ask you will ask me I'll ask somebody else. So that's how you and I don't want anybody to give me book gift unless he has read and he thinks that Ramsh should read it.
You know what people do any book they send they themselves are not read it. So I think the best thing is to read a book you love it. Same book you keep gifting so that you know why you're gifting to somebody. Yeah. Uh one piece of advice you've passed on to uh your son as an investor or for life. One piece of advice say important.
Yeah. So he he's smart. He's much better than me at his age. Okay. Uh I think not advice but I taught him at the age of 11 or 12 power of compounding. How to do compounding? Mental compounding. Compounding everybody can do one calculator. But when you are in the real life, you are not carrying calculator with hand.
You know mentally you should be equipped like your tables. If you know the tables, you can do all the transactions. Indians are very smart in that. But when you don't know even table, you don't know by chance plus and minus also. I mean you can't add up say three numbers 25, 30 and 45. I mean then there's a problem in you carrying out any kind of a commerce.
So uh so I think one of the biggest thing I would say that for the all the early uh investors and those who are making please understand mental compounding models which is very simple but nobody wants to have that compounded thinking what is important is to learn the compounding and have compounded thinking index that one 50,000 or three lakhs I'm doing nothing I don't have any foresight it's just for 45 years it has compounded 15%, I'm saying 5 years more 15%, it will go to 1 lakh 60,000 and another 5 years it will go to 3 lakh 20,000 three lakhs so from 80,000 you start it will be 3 lakh 20,000 I'm saying only three lakhs so there's no prediction it's just a compounding of whatever has happened in last 45 years but since people don't know compounding they find it like how can it happen
so final question and we'll end on a philosophical note What is the meaning of wealth to you today? Today for me wealth is now see God has given me more than what I ever thought. Though I I I always had ambition to earn lot of money. Even now it is there. There is urge to excel in wealth creation also.
Okay. But wealth doesn't mean money for me. Now wealth has usage. And I think uh one of the thing is that giving while living. So I would like to do as much as I can do but I'm learning the game of giving. Giving is going to be far I mean not far tougher but that also is going to require a lot of time and strategy to give effectively what you have earned and I hope we have 20 30 years more.
So we will in a compounded way uh because of the country is compounded and uh uh so I'm going to earn a lot of money. So we are going to give give away lots of wealth while we are around and then we can actually allocate and we can see I mean my money for the size of the country is nothing but uh one or two uh if I bring focus on to one or one cause not even two one cause I think I can make a difference.
you already have made a huge impact and a huge difference on on a lot of investors and the way you've shaped the way we think about compounding investing and I think the most important takeaway for me personally today has really been what he said right at the start which is you have to have a very strong value system and I think that is something that we apply not just to our investing journeys but also as individuals and how we live our lives
you have to be I think above that you have to be good human being I mean one of my friend Sanjay he said in 85 he said Ram you have to be a good human being that's a I mean it cuts across I mean now you have the definition of what is a good human being I have a definition for but it's common you've got to be a good human being rest all the one thank you so much sir words of wisdom not just about investing but just how to live our lives more fruitfully and be good human beings thank you so much for joining us on grow good very good thank Investment in securities market are subject to market risks.
Read all the related documents carefully before investing. Please read the risk disclosure documents carefully before investing in equity shares, derivatives, mutual fund, and all other instruments traded on the stock exchanges.
Comments 0