What I learnt from Ramesh Damani

This post is in continuation of my What I Learnt From Series (see here)

Ramesh Damani is a well known Indian equity investor and has been investing in the Indian markets for decades.

What I learnt from him:When you are supremely confident of a stock, back up the truck on it

In an interview he says,”The biggest failure of my life is in the inability to dream big .In the late 1990s, Ramesh Damani was supremely confident about the prospects of two stocks: McDowell (now United Spirits) and Bharat Electronics. He knew that there was such a gigantic and profitable market for liquor in India that McDowell would do very well. Yet McDowell was quoting at such beggarly valuations that you could have bought the entire company at a market capitalisation of only Rs. 200 crores. The same was the story with Bharat Electronics, the blue chip PSU, which held the rights to all multi-billion dollar defence deals.

Ramesh Damani says he had the means to buy 10% of the equity capital of both companies. If he had done that, then, at today’s market capitalisation in excess of Rs. 50,000 crore for both companies, he would have been worth Rs. 5,000 crore. “I would have had to do nothing else. Just two stocks would have made me a Forbes billionaire” he exclaimed. “You will never get seriously rich by buying 2,000 or 10,000 shares. When you get a seriously attractive opportunity, back up the truck with the stock” he advises.

2 replies on “What I learnt from Ramesh Damani”

Is NBCC such an opportunity? Though valuations are fair, the opportunity it represents is humongous. If it can remain competitive which i think it will atleast under this govt, it will reach similar heights

This is looking back in hindsight and for many reasons is a seriously dangerous advise (“backup the truck”) for most people.

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