Ace investor Ramesh Damani shares words of wisdom

Ramesh Damani, often called the Nawab of Dalal Street, shared his learning about the stock market with Mumbai city’s Rotarians recently. During the session, he shared four principles—try to buy stocks about examining them; need to learn, unlearn and relearn; buy when there is fear (buy things on discount) and stock markets are unusual. After delivering a wonderful presentation at Taj to a group of Rotarians, Damani spoke to The Free Press Journal’s Jescilia Karayamparambil on various topics.

Excerpts:

When can the positive impact of GST be felt in the market?
For one quarter, we will struggle and eventually, there will be some adjustment. The organised sector will continue to explode. It is a very significant change that has happened. Along with GST, once we see the money from demonetisation and the efficiency factor kicking in, India can achieve 8-9 per cent growth rate next year.

What kind of impact does NSE’s trading glitch leave on India market?
It was an unfortunate event. Such things take place. Glitches like these are seen in many cases. For instance, airlines face such issues now and then. Such things happen and it is fixed that is important. These are such complex technologies that are running nationwide. We should cut them some slack.

SEBI came out with ban on P-notes. How do you see that impact the market?
It just came out. I have not got a chance to go through it.

What is your advice to potential investors?
Market has gone up so much that people keep asking me if they should invest. I would reply by saying that the market would grow further. Use the market as a vehicle to get rich over time. It is not a quick rich scheme. If you move 18-20 per cent of your money over 20-25 years, you will be fine. Small portion of money will become large in long-run. My advice to everyone especially India which is a young country, is to get it started. The first thing in order to test waters is to get your feet wet.

What is your take on FDI flowing in through debt instruments?
I do not follow this very closely. But generally speaking India is going to attract lot of FDI into the market due to the young population. India will be the youngest population in the world in few years’ time. There are so many things to be done in infrastructure and real estate. So, one can expect huge inflow of FDI into the country. I think, we should encourage FDI and that keeps the vehicle of commerce going. This is a good thing for all the industries.

What is the one thing that worries you the most?
The one thing that worries me the most is cyber security. There can be more than 50,000 things and each of the things could be a point of attack. If there is a technology that will help us deal with cyber space, I think it will be very helpful.

How would new development in the real estate sector impact their stocks?
Large scale metro-oriented real estate players will do well. We are looking at large metro scale projects and companies that are liquid. These companies will be able to build houses for the middle class which will be affordable. So, I believe that those stocks will have better chance.

Mutual funds have been increasing. How do you see that change help the market?
We have been bemoaning the fact that domestics are not buying Indian stocks. But for the first time domestics have been buying India, there is an avalanche through SIP, demonetisation and many other factors which have propelled the market. I think the money will continue and this is just the start. There are many more years to go before it ends. This does not mean, we will escape volatility.

Is there something you would like to add to the investors or companies who think about entering the market?
People often ask me that when I came in, the index was 700 but now it more than 31,000. Despite the market going up 25 times, what would next 25 years bring? I feel the opportunities for tomorrow will be much greater and then the last 25 years. There are reasons to be optimistic. You need to get invested, if you do not put your products productively, you will be worried about the future. Investing when you are young is a great way to make provisions for future emergencies.

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