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  1. Raamdeo Agrawal’s investment mantra: Hold on to compounders to create long-term wealth

Raamdeo Agrawal’s investment mantra: Hold on to compounders to create long-term wealth

Reputed stock market veteran Raamdeo Agrawal says that investors must hold on to “compounders,” to create long-term wealth.

By: | Updated: December 8, 2017 1:56 PM
Raamdeo Agrawal says that great companies have the potential to return much beyond investor expectations. (Image: Reuters)

Reputed stock market veteran Raamdeo Agrawal says that investors must hold on to “compounders,” to create long-term wealth. Sharing insights from Motilal Oswal’s 22nd annual wealth creation study, Raamdeo Agrawal said, “This is after two and a half months kind of study, so, one of the things about investing and making a lot of money in the market is that you need compounders and India produces a lot of compounders like HDFC Bank, HDFC, Infosys.” According to the co-founder of  Motilal Oswal Financial Services, investors trying to time the markets could end up with poor returns.

“Timing the market kills the overall return of the portfolio,” he had said last month.  “If you invest for the long-term, you’ll pass through phases of very high return, very low return, a phase of no return and also negative return. All this put together, creates long-term return. People want only high return phase. They don’t want other three. You will never have long-term return like that,” Raamdeo Agrawal had said at the sidelines of an event held recently.

A firm believer in “buy right” and “sit tight” philosophy, Raamdeo Agrawal said today that great companies have the potential to return much beyond investor expectations. “Great companies, and there but are just handful of them right now – live much longer than what investors’ think and they create big money compared to so-called stocks which double in quick time,” Raamdeo Agrawal told the channel.

Raamdeo Agrawal is a regular attendee at the Berkshire Hathaway annual meeting in Omaha, since he met Warren Buffett for the first time in 1994. Calling Warren Buffett his “guru,” Raamdeo Agrawal, the MD and Co-founder of Motilal Oswal Financial Services swears by the legendary icon’s investment philosophies.

In a recent interview to ET Now, Raamdeo Agrawal revealed how Warren Buffett’s investment philosophy regarding diversification helped him to double his portfolio wealth in one year’s time. “I started buying stocks in 1980, so till about 1994, I used to think I am very smart guy and in my 10 crore portfolio, I had 200 stocks. More than 200 stocks, all sorts of junk were there, some good stocks were also there. Then I took one after I read Buffett first time. I cleaned up the portfolio and I had only 15 stocks that very year my portfolio doubled,” Raamdeo Agrawal had explained.

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