Ramesh Damani is Bullish on Niche IT Stocks and I've Found One for You

Feb 23, 2018

Kunal Thanvi, Research analyst

Many of you, dear readers, know that I love to learn from the super investors of India.

I closely follow the portfolios of more than forty super investors.

Meeting them in person is always fun and a great learning experience too.

Two weeks back, I got an opportunity to meet more than two hundred people. All of them were smart investors.

I am talking about the Equitymaster Annual Conference.

The only time in the year when we get the opportunity to meet our very smart subscribers.

I was delighted to talk to so many of you.

I also got the opportunity to meet Ramesh Damani.

Ramesh is an adherent follower of the legendary Warren Buffett.

He was one of the key speakers at Equitymaster conference this year.

I got an opportunity to ask him some tough questions.

Ramesh Damani and Me at the Equitymaster Conference

For those who could not attend the conference, I would like to share the key takeaways from his talk and my conversation with him...

  • Investing early in life - One should start investing early in life to take advantage of compounding and have a very long-term investment horizon.
  • Invest in the business and not in the stock.
  • Bullish on India - He believes the next twenty years will be better than the last twenty years, both for the Indian economy and the Indian stock markets.
  • Recent correction - The correction is not the end of the bull market. This is a healthy correction in the ongoing bull market.
  • Current opportunities - He's bullish on the real estate sector, airlines, consumer durables, niche IT companies with intellectual properties, among others.
  • Crypto currencies - The blockchain technology is here to stay.
  • Reading - Read a lot. Two websites that he follows are thebrowser.com and longform.org.

It was a pleasure to hear him talk and discuss many issues that will help me and my Smart Money Secrets subscribers.

In fact, I am glad that I've already recommended one real estate stock.

Just last week, Sarvajeet and I travelled to New Delhi to meet a niche IT company.

Sarvajeet and I Travelled to New Delhi

This company has, over the years, received multiple patents, copyrights, and trade-marks. In other words, it owns intellectual property which has differentiated its business from the competition.

Unlike other many other niche IT companies, this one faces no concentration issues related to clients, geographies, and products. In fact, it is one of the few IT companies in India that offers products rather than services.

Ramesh believes, niche IT companies with strong intellectual properties will be major beneficiaries of future growth in banking, insurance, and other financial industries across the world.

I agree with him.

I'll release my report on this company on Monday, 26 February.

Watch out for it.

I believe this niche IT stock could be a huge wealth creator for subscribers of Smart Money Secrets in years to come.

By the way, after the conference, I got an opportunity to hear another super investor, Professor Sanjay Bakshi. Next week, I'll write to you about how his talk has helped me big time. Stay tuned.

Chart of the Day

Talking about IT product companies, one of their major expense is research and development. Globally, software product companies are investing heavily in new product development.

This helps them stay ahead of the curve by getting patents before competitors.

Today's chart shows some Indian IT product companies and how much they spend on research and development as a percentage of overall sales.

Company 5 with the highest R&D expenditure is the niche IT product company that Smart Money Secrets has identified.

A Major Indicator for a Product Company is R&D Expense

Kunal Thanvi
Kunal Thanvi (Research Analyst)

PS: In these times of market uncertainty, do you wonder what the best investors in India are doing with their portfolios? Wonder no more. Click here to find out.

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2 Responses to "Ramesh Damani is Bullish on Niche IT Stocks and I've Found One for You"


Sep 21, 2018

Very nice


Pradeep Kumar Nair

Feb 26, 2018

It is not just high R & D investments that define a product company, it is also marketing investments. Unfortunately in India, product companies don't do both enough and the result is there for all of us to see.

As Robert Noyce, oo-founder of Intel, said very early in their start in the late 60's , "Marketing Makes Products" , cororllary being not just R & D and engineering.

In your recommendation, please check for their marketing investments to

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