Wealth wizards on the art of investing

Words of wisdom by 20 successful investors on how to make your money grow. While the basic rules remain the same, patience and self-belief are essential too, they say

Curated By: Forbes India

Published: Jul 11, 2014

1/17

Chaitanya Dalmia: Believe in value investing, or the art of investing in stocks that the market has undervalued. Look beyond the fair value of a stock, especially its technical factors before deciding to exit. Go for funds managed by credible and competent managers for the best chance of earning strong returns. You will lose out if you “stick to fundamentals alone”

2/17

Ramdeo Agarwal: Strategy is simply quality, growth, longevity and bargain value. Do not let yourself be driven solely by market trends that are speculative and think about underlying quality of a business for the long term. “If you’re sure, just buy it. Don’t bother about the market at all."

3/17

Ashish Dhawan: Be ready to stay invested for the long-term and make sure you understand the business and prepare yourself to have a risk-aversion and diversification theme. Although easily forgotten, “historical perspective is equally important”

4/17

Sanjay Bakshi: Value investing is the key. Identify and invest in high-quality businesses with solid management and take on minimal debt. He makes sure to “invest in businesses that have enduring competitive advantages and scalable business models run by owners who are both honest and competent”. And, “do not listen to brokers”

5/17

Samir Arora: Judge a company’s worth by its fundamental investment philosophy. Hold yourself accountable and stop blaming others. “Learn from your mistakes.” Stay ahead by focussing on industries that will be “new” and also those that will be “new, new”. Be cautious, but don’t be afraid to find hidden gems in companies with good potential."

6/17

Saurabh Mukherjea: Be stringent and identify companies with a proven management track record and clean accounting standards. Be cautious of companies with extensive political connectivity. Money is a “by-product of what we do... it cannot be the goal”

7/17

Anoop Bhaskar: Don’t be afraid to take on a little-known entity if you believe it will give you returns. Don’t get “bogged down by time periods”. But do take a different point of view

8/17

Kenneth Andrade: Pick small stocks and invest early. Ideally, pick a single product company that has the potential and room to grow. Don’t believe that market run ups and mid-caps get expensive because he has “never seen a company at a value [he] wanted to buy that [he] couldn’t buy.” Have discipline with your holdings and it will work

9/17

R Srinivasan: You can be risky as long as it’s logical. Markets are volatile and, of course, funds that are topping their game now might not be so successful in the future. So, “you cannot outperform every movement”. And with investment, believe in luck."

10/17

Bharat Shah: Invest in great businesses at reasonable valuations. Avoid bad businesses and never pay too high a price. Along with that, look at the size of the opportunity and look for quality management. Give yourself a dose of humility because “you as the investor have a duty towards your own self... markets don’t have the duty to make you rich just because you put some money in it”

11/17

S Naren: Don’t be afraid if your approach contradicts popular opinion; when capital flows are high, just think contrarian. Have a process before making any decisions and be disciplined. One suggestion: “Force yourself to write five lines before you take a decision on why you are buying or selling something."

12/17

Ramesh Damani: Identify potentially successful businesses and invest in them for the long-term. Hang on to them and know that “just because a stock doubles, it is not a reason to sell it”. When markets are down, buy aggressively. This is his one regret from 2008, but since then, he hasn’t allowed many more

13/17

Rakesh Jhunjhunwala: Trends make best friends, and your part of the friendship is to not question or pre-empt those trends. Spot the trends and also take risks if you believe others are underestimating the value of a company

14/17

Sunil Singhania: Believe in bottom-up investing and focus on global macro-economic factors that impact Indian markets. Invest in small, rapidly growing companies. Be a zebra: “Zebras try and stay in the centre of the herd to safeguard against attacks, but the zebras at the outside of the herd get the freshest grass

15/17

Ridham Desai: Think of the economy like a winning car with the government as the driver. “I think the market will give time and the benefit of doubt to the government,” he believes. So, keep learning and adjusting to the variables blazing trails despite market forces

16/17

S Nagnath: Market movements are fundamentally moved by human thought processes and minds coming together. Understand your own risk-return trade-off and apply it to what you do. “You have to define what returns make you happy, what risks you are ready to take to achieve the returns.” And enjoy the process

Aswath Damodaran: Just be yourself. Be humble and recognise that success requires a lot of luck. &ld

17/17

Aswath Damodaran: Just be yourself. Be humble and recognise that success requires a lot of luck. “If you are an investor, you have to make your own judgment.” Don’t try to invest like any other investor, invest in ways that make you comfortable and happy