Raamdeo Agrawal shared trading tips to survive in the times of uncertainty.
The Covid-19 pandemic has brought the world to a standstill and apart from the economy, the stock market, too, has been badly hit. At an economic meet a few months ago, Raamdeo Agrawal, Joint MD of Motilal Oswal Financial Services, shared his tips on surviving in the stock market during bad times.
Given the current scenario with Covid-19 affecting almost all sectors, the market veteran's advice is like an oasis in the desert for many.
"To invest in the stock market you need to find winner categories. You have to be an optimist when you come to the stock market. You need die hard optimism. If you are sceptical, you are not cut out for the stock market. You make money only if the company makes money. You have to see which businesses are large in winner categories, which will do well," Agrawal said.
True story The financial services boss drew inspiration from his own experience to share how all things work out well in time. "I started in 1987 with literally nothing. In 1990, I had a crore. When Motilal Oswal and I started this company it was the worst slow down. The markets were in very bad shape. Our forex was 2 or 3 billion dollars. It was a tremendous opportunity. Then the Harshad Mehta scam happened, probably it happened only for us.I had 15 lakhs when the scam happened. In the next 18 months, I made 30 crores. This is the nature of the market, you cannot predict. You need to have faith. The longer the wait, the bigger will be the stock," he said.
Agrawal who has a good sense of humour added, "We didn't know how many zeros are there in crore and then it crashed. That 30 became 10. Next seven years we used to buy the stock, there was no index, if the stock does well, we used to sell. Then cable TV came, NASDAQ came and people started talking about the indexes. Then Y2K came, we had Satyam, Infosys and many other companies. We made tons of money, that 10 crore became 100 crores."
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"The nature of the market is uncertain. You cannot predict it. You need to have faith," says Raamdeo Agrawal. Russian roulette The markets ups and downs continued as did the fortunes of the company. "In 2001, I had 100 crores, then again it crashed. It had to crash. Then we had 30 crores. We thought 2002-03 was very bad. The two wheeler production went down. We thought we were in the wrong profession. Let's close this and do something else," Agrawal shared.
Another twist of fate ensured that Agrawal and Oswal continued to be in the business. "Then the market went up by 100X. My portfolio went from 30 crores to 550 crores. We just rocketed. My 10 crore company became a 1000 crore company. Would love to live in 1992, 2000 and 2008. Then again it crashed. It was down to 225 crore this is mine and Moti's personal savings that has grown to 1700 and is growing," he added.
Rules of the game Summing up his experience to be lessons, Agrawal gave some pointers for those investing in the stock market.
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"1.There is no making money in the stock market in a straight line. 2.There is going to be deep corrections in your portfolio," he said.
He ended with some golden rules for investors, "Rule 1: Don't lose money. Rule 2: Don't forget rule number 1. Don't invest in crooks. Pick an honest guy. See if the person has the competence and the energy. Everybody is very hungry to become rich quickly and in the process people are dishonest. You have to find that exceptional one per cent honest guys. If you invest with them you will do very well."
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Words Of Wisdom: When Uday Kotak, Ajit Doval, Raghuram Rajan Spoke About Economy, Leadership & Life Goals
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The Lalit Doshi Memorial Lecture (LDML), instituted in the name of the eponymous former civil servant, has been hosted in Mumbai annually since 1995.
On Monday, August 5, Uday Kotak became the 25th speaker to deliver it. The LDML speaker club is an illustrious one (even though the absence of any female speakers in the list is jarring).
Here’s a look at what past speakers have spoken about in the address:
The Lalit Doshi Memorial Lecture (LDML), instituted in the name of the eponymous former civil servant, has been hosted in Mumbai annually since 1995.
On Monday, August 5, Uday Kotak became the ..
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Uday Kotak, MD, Kotak Mahindra Bank
“Let us embrace digital. That will transform India’s finance like nothing else we have seen in the past. And lastly, in that context is a less cash India. India’s desire for cash just doesn’t seem to be going down. It shocks me when I am told at many stores, small stores, including in the city of Mumbai, so I can’t even comment on what must be happening across semi urban or rural areas. Most of the times you are asked the question, ‘How do you want to pay..bill ya bina bill?’ We are still not getting out of that mindset of cash as the basis for dealing. Therefore anything that makes us a less cash economy is useful. It is also surprising to me that the levels of currency in circulation that we are back to. It is almost equal to, on a percentage basis, to pre-demonetisation levels. We need to change that.”
Uday Kotak, MD, Kotak Mahindra Bank
“Let us embrace digital. That will transform India’s finance like nothing else we have seen in the past. And lastly, in that context is a less cash India. India’..
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Dr S Jaishankar, current Minister of External Affairs in the Government of India
“There is absolutely nothing wrong with aspiring to stake a greater claim in different domains. Among our aspirations we should strive to realize is permanent membership of the UN Security Council. But in the interim, there are milestones that mark a journey towards a greater global management role. Joining different international and regional groupings and mechanisms is one such step. Becoming a member of technology export control regimes is another related measure. Taking the initiative to undertake humanitarian and disaster relief operations — as we did in Nepal or Yemen — also makes sense. Playing a constructive role in important global negotiations, whether on climate change or on sustainable development goals, is part of this shift. A sharper willingness to articulate our interests and be resolute in its pursuit is also necessary. Such an India cannot have a herd mentality or rely on abstention as a default position on tricky issues. There will be choices we have to make, sometimes even within a region or between friends.”
Dr S Jaishankar, current Minister of External Affairs in the Government of India
“There is absolutely nothing wrong with aspiring to stake a greater claim in different domains. Among our aspiration..
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Kaushik Basu, former chief economist of the World Bank
“I want to mention two areas where India can do very well, if the government creates an enabling atmosphere. This is bit of a China-style policy of identifying special sectors and making them vanguards for the whole economy. First, India can be a hub for higher education in the world. People will come not just from developing countries, Africa, Asia, Latin America, but from United States and Europe. Come to India, four years of excellent education, much cheaper than in rich countries, and then you go back…The other sector where India is already doing well but can do better is providing healthcare services for the world. Health-care is extremely expensive in today's world. India can provide this at a much lower cost.”
Kaushik Basu, former chief economist of the World Bank
“I want to mention two areas where India can do very well, if the government creates an enabling atmosphere. This is bit of a China-style poli..
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Raghuram Rajan, former RBI governor
“Undoubtedly, cash transfers will not resolve every problem, nor are they uncontroversial. A constant refrain from paternalistic social workers is that the poor will simply drink away any transfers. In fact, studies by NGOs like SEWA indicate this is not true. Moreover, one could experiment with sending transfers to women, who may be better monitors and spenders of the cash. Some argue that attaching conditions to cash transfers – for example, they will be made provided the recipient's children attend school regularly – may improve the usage of the cash. The danger of attaching conditionality is that if the monitor is corrupt or inefficient, the whole process of direct benefits transfers, which aims to by-pass the existing structure, can be vitiated. Nevertheless, it will be useful to monitor usage carefully where automation is possible, and automatically attach further benefits to responsible usage.”
Raghuram Rajan, former RBI governor
“Undoubtedly, cash transfers will not resolve every problem, nor are they uncontroversial. A constant refrain from paternalistic social workers is that the poor ..
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Deepak Parekh, chairman, HDFC Ltd
“Leadership, however, is that intangible quality that eludes any single description. To my mind leadership invo lves an art form, rather than a pure science, since it includes the subjective element of the individual himself. Leadership therefore, has different facets, and leaders tend to have a distinct and separate personality and ideology and a plethora of styles. I would hence like to postulate leadership to be a function of administrative and managerial talent, with an overlay of a risk taking ability, the ability to anticipate and react to an emerging environment, and most of all, to have the charisma to inspire willing followers.”
Deepak Parekh, chairman, HDFC Ltd
“Leadership, however, is that intangible quality that eludes any single description. To my mind leadership invo lves an art form, rather than a pure science, since..
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N Vaghul, former chairman, ICICI
“Is it possible for you to imagine a person who is a stithapragyna in a sense that he treats praise and abuse at the same level, treats happiness and misery as equal. Even if one does not complete the final process of eradicating the I consciousness the improvement in the quality of life is still worth the effort. So the relevance of the spiritual values in modern life really comes to this. Whether you believe in the ultimate goal or not, whether you believe in the spiritual dimension or not, the process of transcendence of the gross mind improves the quality of your life. When the critical mass of the society, were to achieve even this limited goal, the transformation of the society will begin.”
N Vaghul, former chairman, ICICI
“Is it possible for you to imagine a person who is a stithapragyna in a sense that he treats praise and abuse at the same level, treats happiness and misery as equa..
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