Raamdeo Agrawal: How Discipline can bring you Success

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13 Jan, 2022

10 min read

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Mr. Raamdeo Agrawal is a well-known figure in the Indian investment world. His performance, the so-called virtuoso, had the clear goal of demonstrating that he is a wise investor. Read on to know about Raamdeo Agrawal success story!

If you've been trading stocks in India for a long, you've probably come across the name "Raamdeo Agrawal" on finance-related websites or news channels. Furthermore, Raamdeo Agrawal is most known for assisting in the formation of Motilal Oswal Financial Services, and his family now owns around 36% of the company's stock. According to Forbes, Mr Raamdeo Agrawal has total assets of $1 billion as of 2018.

Today, we observe Ramdeo Agrawal's success through his own life and the realm of speculation in pursuit of the flash that catapulted him to his current position. We'll concentrate on Raamdeo Agarwal's success story in the Indian stock market.

Raamdeo Agrawal: Investing in the Beginning

Raamdeo Agrawal is a Chhattisgarh native who grew up in Raipur. As the son of a farmer, he claims that his father's primary financial strategy was to save and invest in his children and their future. Raamdeo Agrawal relocated to Mumbai to complete his higher education.

In Mumbai, Agrawal studied chartered accounting and began his career as a sub-broker in 1987. By 1990, he had become a stockbroker and had begun trading in the stock market on his own. He met Motilal Oswal, his partner and closest colleague, in Mumbai. Their paths crossed while they were both staying in the same hostel. Oswal depicted Agrawal as a brilliant student who was eager to learn about the organization's reports and financial data.

Raamdeo Agrawal and Motilal Oswal co-founded Motilal Oswal Financial Services, and his family owns around 36% of the company today. He and Ram K Piparaiya co-authored the book Corporate Numbers Game in 1986.

Investing approach

Ramdeo Agrawal's success can be attributed to his methodical approach to investing. The following are some of the primary tactics he advocates:

  • Be patient and expect wonderful results.

Raamdeo Agrawal believes that the more you speak up for what you believe in, the better the outcome will be. He previously claimed that he started with nothing in 1987 and had amassed a crore by 1990. During the early phases, Motilal Oswal was in bad form. However, after a year and a half of the Harshad Mehta ruse, they had made 30 crores.

According to Agrawal, one cannot predict the market, which necessitates a great deal of patience and trust. Persistence and long-term investments, he claims, might help produce a higher quantity of earnings.

  • Invest in what you're familiar with.

Prior to contributing, it is critical to have a thorough understanding of the company into which you desire to invest. To be satisfied with the business, conduct study and analysis. Understanding the many risks involved and establishing a method that works for you is what can make a business venture successful.

  • Investments for the long term

According to Raamdeo Agrawal, you should invest continuously for as long as possible. "When you have excess funds, you should always invest," he argues, "and when you have a pressing need for funds, you should always sell."

Investors may encounter issues as a result of market volatility from time to time. As a result, it's vital to buy stocks at a reasonable price and sell when appropriate. Long-term investments can help an investor weather short-term volatility and other irrational human reactions to the stock market. How financial experts react to a specific situation has a continuing impact on the stock market.

 

Portfolio

Here are some of Raamdeo Agrawal's most well-liked and useful historical speculations from his early years in the profession:

- In 1996,  purchased Hero Honda shares for Rs. 30 each and sold them for Rs. 2600 in 2016. He also received a 600-per-share dividend during the course of the 20-year term.

- Infosys - In the mid-1990s, he bought shares in Infosys, sold them, and made a profit of almost 12%. He received constant dividends and incentives from this investment over this time period.

- Eicher Motors - Bought Eicher shares for Rs. 900, and they rose to Rs. 32,000 in 2017.

According to Raamdeo Agrawal, an investor's resources should be limited to 15 stocks for their own incentive. He considers 15 stocks to be excessive. He likes to recommend a group of 4-5 stocks. Diversification can be achieved by investing in a variety of stocks.

However, by the time the portfolio reaches 15, roughly 90-92 percent of the investment's overall advantages have been claimed. After that, the advantages are minimal.

If an investor wants to take advantage of the last 10%, he or she should diversify their holdings. It would eventually reach a stage where it would have an impact on the quality of judgment. This is because it would discourage him from learning everything there is to know about the stock.

Portfolio management that is disciplined

Raamdeo has a great amount of control over his holdings. He decided to sell the sections of Berkshire Hathaway that no longer matched his portfolio channels. This was true independent of Warren Buffet's object of worship, to which he continued to contribute.

What factors contributed to his investment success?

For long-term wealth growth, Raamdeo Agrawal swears by the QGLP formula (Quality, Growth, Longevity, and Price).

  • Quality

Following his investments in Financial Technologies, Raamdeo Agrawal realized the importance of quality. He thinks this to be one of his most regrettable choices. After investing in Financial Technologies (India) Ltd, he lost money. As a result, he realized the significance of a company's management. He bought shares for Rs. 1150 and had to sell them for Rs. 150 later.

Raamdeo stated that after it, he paid extra attention to the company's administration in general. He views management as a critical aspect because all other information about the company is readily available to the general public; nevertheless, information about the company's management remains secret.

He ensures that his projects are managed in an honest, good, and transparent manner. At the same time, management should look after investors by paying out optimal dividends and demonstrating growth potential.

  • Growth

Growth is a major feature that Raamdeo believes investors should look for when choosing firms to invest in. Investing in such firms will result in big revenues at a low cost. According to Raamdeo, investment is nothing more than "estimating the current value of all future profits" and making decisions based on that estimate.

  • Longevity

The company's ability to preserve or expand present profitability, as well as its ability to endure shifting market conditions.

This element encourages investors to put their money into long-established businesses. This provides some security to the investments, as well as enough information for investors to make informed decisions.

  • Price

A stock's price must be determined in accordance with the value it provides. This indicates that the price of a stock should be lower than its value when you buy it. The thing we pay for is the thing we get; the thing we get is the thing we pay for. As a result, equities are more tempting when their price is lower than their inherent value.

Wrapping Up

Warren Buffet is a big supporter of Raamdeo Agrawal. Agrawal encourages folks to make well-informed decisions and to invest wisely. His narrative is an inspiration and a source of hope for all investors, past, present, and future.

If there's one thing to take away from his investment advice, it's that he regularly makes smart decisions. Prior to making any investment, be persistent and conduct a comprehensive study. Avoid allowing fear to lead you to make irrational decisions on stocks or organizations. Always be on the lookout for quality, development, longevity, and pricing.

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