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Equitymaster Conference Day 2: "The Best Days of Our Country Are Ahead of Us"

Feb 11, 2018

It's the second and final day of the Equitymaster Conference 2018.

Today's speaker lineup includes Ramesh Damani, Rahul Shah, Richa Agarwal and Apurva Sheth.

BUT, sharing photos from inside The Taj is okay. So, here's Vivek speaking to a packed house yesterday...

Vivek is the tallest person at the event, but you can barely see him from the back of the room!

Emcee for the event, Anisa Virji, is introducing the first speaker of the day...

"The Best Days of Our Country Are Ahead of Us"

It's Ramesh Damani, the "Nawab of D-Street."

Ramesh joined the market in 1989 when the Sensex was about 600. At the time, you could buy and control huge parts of Indian industry for barely anything. For example, in the 2000s you could have bought almost 90% of India's alcohol industry for just $200m.

Young people growing up in the USA don't have the same investment opportunities as young Indians today.

According to a very successful and wealthy investor friend, the best decade to invest in India is right now. The opportunities are manifold. The Nawab shares this opinion. It's rarely paid to be bearish in India.

Most people don't understand the principle of long-term investing...

Invest Rs 10 laks today and double it every 3 years... in 30 years you'll be among the richest people in India.

What's happening next?

In India, this is a correction in a bull market. Corrections are short, sharp and swift.

Even if the market is flat for the next year, that's no big deal if you're a long-term investor.

So where are the best investments today?

Real estate is a good opportunity. RERA will help weed out weak, poor businesses.

Indian technology companies that own intellectual property and serve the domestic market could also do well.

Finally, airlines.

Indians are moving from trains to planes.

In Mumbai, the international airport is already at capacity.

Mumbai to Delhi is already one of the busiest routes in the world.

Warren Buffett said never invest in an airline, but he just recently invested billions in airline companies.

So India boom or bust?

Boom.

"The best days of our country are ahead of us."

Successful investors are voracious readers. Ramesh recommends two content aggregation websites he's spends hours reading each day: thebrowser.com and longform.org.

Why Investors Water Their Weeds and Cut Their Flowers

Next up is Rahul Shah, editor of Microcap Millionaires and Profit Velocity.

For the last 4 years, Rahul has beat the Sensex by 2x. But will he be able to repeat this success in 2018?

Three things Rahul doesn't worry about is where the Sensex will be in 10 years, meeting management teams and following India's "super investors." He believes you can learn everything you need about a stock by looking at the numbers.

The #1 valuation tool he uses for a specific stock is price to book value.

As a general rule, when you invest in stocks when the Sensex is selling for 18x P/E (price to earnings ratio) you will do well.

But invest in stocks when the Sensex is selling for 22x P/E and you typically do poorly.

In other words, buy stocks when they are cheap.

Another rule Rahul advocates is giving investments a performance deadline. Selling a winner is easy, but investors hold onto losers for far too long.

You're supposed to "water your flowers and cut your weeds", but many investors do the opposite because they're scared of taking a loss!

There were no seats left for your Roving Report as Rahul Shah shared the methodology behind his incredible track-record...

Get Rich from The Small Cap Gold Rush

After lunch, Richa Agarwal is up...

Through her publication Hidden Treasure, Richa has managed to beat the Sensex as much as three times.

Her secret?

Small-cap stocks. Often ignored, yet highly profitable.

But how does she decide which small-cap stocks to invest in?

One thing Richa looks for is "pick and shovels" plays.

What does that mean exactly?

During the California Gold Rush, some of the biggest winners were not gold miners striking it lucky, but companies that serviced miners, selling tools to miners such as "picks and shovels."

Today, the strategy still works...

Instead of directly investing in a single gold miners, invest in a company that gets rich from the overall trend.

But when investing in small-caps, it's key to let the power of compounding work for you.

It takes time for a small-cap to transition into a mid-cap, or blue chip, and if you're patient, the returns can be life-changing.

The Lazy Man's Way to Stock Market Riches

After Richa it's Kunal Thanvi, editor of Smart Money Secrets.

Kunal advocates a simple strategy called "copycat investing."

In short, instead of doing a lot of grunt work, trying to find the best investments in India, Kunal just follows what successful investors are doing.

It's lazy. But is it successful?

According to The Economic Times, if you had simply followed Dolly Khanna and Mohnish Pabrai into Rain Industries you could have made 250% in one year.

Picasso said, "good artists copy, great artists steal."

And Steve Jobs said, "I've been shameless about stealing great ideas."

Currently, Kunal follows about 45 super investors.

But he warns that you shouldn't just blindly follow everything super investors buy...

Let them be your guide, and then filter and invest based on your own needs.

What are super investors looking at right now?

You've already heard about these two themes before...

Real estate and finance.

Sensex 100,000 is Happening a Lot Sooner Than You Think!

The last speaker for today is the first market technician we've heard from, editor of Profit Hunter Pro and Peak Profit Alert, Apurva Sheth.

Apurva has a bold prediction, Sensex 100,000 by 2024.

If earnings keep growing by 16% CAGR, we are there!

But what's the chance of that? Very good according to Apurva, and it's all thanks to human nature.

That's because human nature remains the same, irrespective of the era.

For example, consider this quote:

"The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers."

That might sounds like something you said to yourself the other day, but it was actually said by Socrates some 2,500 years ago.

Point is, we like to think we're unique, but the truth is we're not that unique. Human history is about 2 million years old, and there are repeating patterns throughout.

Apurva makes recommendations based on these three simple principles:

  • History repeats itself
  • Prices move in trends
  • Market action discounts everything

If all this is true, then according to Apurva, the next 6 years will be extremely profitable for Indian investors...

Apurva's market cycles: 1992 to 2000 was flat, 2000 to 2008 was up, 2008 to 2016 was flat... if history repeats itself, then 2016 to 2024 is UP...

Were We Too Short-Sighted?

Well, that's it for another year...

If you weren't able to make it, recordings will be made available shortly. Keep an eye out for an email from Rahul.

Since we can't take a photo of The Taj, here's a photo of The Gateway of India for you...


The Gateway of India was built to commemorate King George V and Queen Mary's visit to India in 1911.

Perhaps ironically, the last British troops to leave India passed under the monument's arches on their way home, after Indian Independence.

The theme for this year's conference was "India 2018: Boom or Bust?"

But when you think about it, the answer is unimportant and insignificant.

India turns 66 this year. She's still a baby, yet her GDP is on track to overtake that of the UK's very soon.

What matters is what happens in the long-run, and according to most of the experts I saw speak this weekend, India's future is utterly incredible.

Cheers,

Colm O'Dwyer
Roving Reporter, Equitymaster

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3 Responses to "Equitymaster Conference Day 2: "The Best Days of Our Country Are Ahead of Us""

Natwalrlal B Vadera

Feb 24, 2018

The best days of our country are ahead of us

Like 

narayan kar

Feb 19, 2018

Whether market will continue upward in 2018

Like (1)

Arun Kumar shome

Feb 12, 2018

I want to invest for five years in small cap fund. Please guide me.. I m 60 "years old. Just retired from service.. Safety is my first choice. I don't want to lose my money in this age.. Please give me the suggestion.. Which company share I will purchase

Like (2)
  
Equitymaster requests your view! Post a comment on "Equitymaster Conference Day 2: "The Best Days of Our Country Are Ahead of Us"". Click here!