by When we talk about the stock market we hear names like Warren Buffett, Peter Lynch, Charlie Munger, Benjamin Graham, etc. they’re all great investors and have inspired many people with their investment journey there’s a lot that we can learn from them as stock investors.
There is one name in the Indian stock market that is very inspiring it is Mr. Raamdeo Agrawal. he started his investment journey in the 1980s and in the last 31 years, he has compounded his wealth from one crore to 2200 crore now that’s an incredible feat simply amazing.
In this article, I want to share his journey and how his wealth grew from one crore to 2200 crore then I will discuss some of the biggest learning from his investment journey.
Normally when a person starts investing in the stock market there is only one expectation multi-bagger returns everyone wants to become rich in no time everyone wants to fetch 10 times to 20 times return in no time but unfortunately rather than creating wealth many people end up losing their money in the stock market.
In this article, I want to share a very inspiring journey of Mr. Raamdeo Agrawal and how he created a fortune worth rupees 2200 crore.
I am sure that by the end of this article there would be some very important lessons for you that would help you in your stock market journey all right let’s get started.
Introduction of Raamdeo Agrawal
- Today Raamdeo Agrawal needs no introduction he is one of the most respected people in the world of the Indian stock market.
- Raamdeo Agrawal is the co-founder and chairman of modular financial services.
- he is a chartered accountant by profession,
- and he started his stock market journey in 1987 as a sub-broker.
- Later co-founded Motilal Oswal company with his friend Motilal Oswal.
- He has been associated with the Indian stock market almost since Sensex was established in 1986.
How Raamdeo Agrawal will zoom from one crore to rupees 2200 crore?
In 1990 Raamdeo Agrawal made an investment of rupees 1 crore in stocks during that time Mr. Harshad Mehta was the big bull of the Indian stock market we all know how he manipulated the market and at that time Sensex jumped more than 500 percent from the level of 700 to level of 4500.
Raamdeo Agrawal also zoomed from rupees 1 crore to rupees 32 crores but then the Harshad Mehta scam got highlighted and Sensex crashed almost around 50 percent over the next year.
As a result Mr. Raamdeo Agrawal’s wealth also crashed from 32 crores to 10 crores.
Normally in such a situation a retail investor would panic and exit from the stock market but Raamdeo Agrawal did not panic he stayed invested eventually there was the next bull run during the y2k market rally in early 2000.
This was the time when the internet became the new sensation every random company with a dot com website was trading at a super high valuation.
The stock market also jumped Raamdeo Agrawal’s wealth zoomed from 10 crores to 100 crores during this period but then the internet companies could not sustain the valuation and eventually, the stock market crashed Raamdeo Agrawal wealth also fell down from 100 crores to 30 crores.
Basically, his portfolio tanked around 70 in that fall again a normal retail investor would have panicked and exited from the stock market.
There was another rally in the stock market from 2003 to 2007. In that rally Raamdeo Agrawal well zoomed from rupees 30 crores to 550 crores but then there was a housing bubble burst in the u.s and that resulted in a deep recession all over the world Sensex spent around 60 percent from the level of 20,000 to the level of 8000.
Raamdeo Agrawal’s wealth tanked around 55 percent from 550 crores to 250 crores again he did not exit it from the Indian stock market, then in the next 10 years, Raamdeo Agrawal zoomed from rupees 250 crores to rupees 1850 crore.
Again there was a heavy correction all over the world due to covid, as a result, Raamdeo Agrawal well tanked from rupees 1850 crore to rupees 1150 crore that was a fall of 700 crore rupees a huge amount isn’t it.
He still stayed invested eventually the market recovered and his wealth zoomed from 1150 crore to the current level of rupees 2200 crore
Mr. Raamdeo Agrawal’s journey is an incredible example of how you can create wealth in the stock market when you invest in the stock market there will be periods of high return, low return, no return, or even market crash.
You can only create wealth in the stock market when you stay invested irrespective of the market volatility, above all you need the courage and conviction to stay invested.
Even if your portfolio falls 50 to 60 percent that is a very good quote from Mr. Warren Buffett.
He says that the “Stock Market is a device for transferring money from impatient to the patient majority of people lose money in the stock market due to lack of patience, they expect the wealth to double in no time without any volatility”.
It doesn’t work like that, yes I agree that Raamdeo Agrawal would have certainly invested more money in the stock market apart from the initial capital of rupees 1 crore but the point is that he stayed invested even after seeing his wealth.
Crore rupees getting destroyed during the market crash a normal retail investor can’t even see a fall of a few thousand rupees in the portfolio he or she would panic and exit from the stock market.
It takes a lot of courage and conviction and that comes only with the right knowledge so that you can identify good stocks and invest with conviction and that’s why I keep saying that don’t invest based on tips, learn how to analyze stocks.
In fact, I strongly believe that the best time to create wealth is not when the market is at its peak but when the market is at the bottom when the quality stocks are available at a discounted prices.
For example, during march 20 when the stock market crashed around 40 percent due to covid that was a great time to invest money but very few retail investors would have invested during that time because it requires conviction to invest when the market is falling.
Takeaway’s
- Retail Investors get fearful during the market crash, so the biggest takeaway from this article is are as follows:
- To take inspiration from Mr. Raamdeo Agrawal’s journey,
- Do not panic with small corrections in the stock portfolio.
- I strongly believe that the Indian economy has a very bright growth aspect in the next 20 to 30 years.
- You don’t need multi-bagger returns to become rich from the stock market.
- All you need is a 10 to 15 percent return for the next 10 to 20 years to create wealth.
- For example, if you invest just rupees 20,000 per month in the stock market for the next 20 years,
- Expect around 15 percent return then you will end up with a corpus of rupees 3 crores.
- Of course, we are not considering the inflation-adjusted return,
- But the idea is to help you understand the importance of consistent investment,
- Without worrying about the ups and downs of the market.
- If you think that 15 percent is a lot of return, and if you want to consider 12 percent for 20 years then your 20000 per month would become 1 crore rupees that’s the power of compounding.
Final Words
The only point you need to understand is that you don’t get consistent returns from the stock market during the bull run you will see great return, and during the bear market you will see huge losses but if you stay invested in the Indian stock market during the ups and downs just like Mr. Ramdeo Agarwal you will eventually create wealth.
One should follow the Risk Management, Money Management, and Fear and Greed concept of the market to avoid big losses.
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