98% of this market speculators, so Raamdeo Agrawal has no lessons for them

On Tuesday, Agrawal told a business news website that there is no point in his sharing investing lessons, as 97-98 per cent of the current market is just about speculation, and listening to his advice “is useless for them.”

Asked to share his market wisdom with the new generation investors, the veteran investor just said: “Don’t bother about predicting the market. Don’t speculate, but become an investor.”

The veteran investor has not only built a successful company in Motilal Oswal Financial Services along with co-founder Motilal Oswal, but also invested in several companies over the past 35 years that have established his stature as a value investor.

He said investors need to look for just two things in a stock when they are digging for wealth compounders. “There are two types of businesses: good and bad. You must understand you are looking at a good business, only good businesses compound,” Agrawal told Money9.

In his time as an investor, Agrawal has invested in several good businesses such as ING Vysya Bank, which he says was the first stock to give him 100 times return. Agarwal has over the years compounded his wealth at 28 per cent annually, nearly double the 15 per cent compounded annual growth rate of the benchmark Nifty in last 20 years.

Finding a good business for Agrawal is only the first step. The second is to find good management. “If you have a good business and a good management then you will make a lot of money,” says Agrawal, who himself swears by investing legend Warren Buffett for everything he has learnt about investing.

In India, where corporate governance standards vary widely from the blue chip stocks to the smallcap stocks, a good management is a rarity. HDFC Bank’s stellar success over the years is attributed largely to the strong management team put at the helm by HDFC Group at the birth of the lender. A similar case can be made for the wealth compounders in the information technology sector.

Agrawal says he enjoys everything about the market, including a market crash, as he looks at investment as a journey, where each and every experience holds its own lesson. “Don’t bother about predicting the market. Don’t speculate, but become an investor,” Agrawal said.