In a conversation on GrowW’s Investor Podcast released on YouTube, the co-founder of Motilal Oswal Financial Services insisted on young investors to resist the pressure to act without clarity. Agrawal said that most 20-year-olds underestimate how little they know about the market. “At the age of 20, what you don’t know, are many things … So if you see value – Price Gap, you have a limited understanding of it.”
He remembered his own investment debut, a tip from Hostel that became a three-pourer. “I bought it 15 dollars, and in a year, two years, it became $ 45,” he said, and noticed that he was about 22 at the time. “Pauses like that will happen.”
Choose a job at the age of 30: professional or passive?
Asked where RS 1 Lakh should go at the age of 30, Agrawal said it depends on whether you want to control or outsource the game.
“If I want to make a career in investing … then you have to go to the stock market and find out what the value is, what the price is, what is profit growth, what is the roe, what is the momentum. I mean, it’s a full -time job, and it has become very competitive.”
Otherwise: “Go and give your money to one of the fund managers and be happy with it.”
Everyone knows the price, nobody knows the value
Agrawal did not stop what he sees as the pitfalls of the market behavior after the dive. “Of the 200 million DEMAT accounts, 160 million are less than 5 years … They have no idea what they buy and sell … (Post Covid) … the market is very impatient,” he said.
He emphasized that understanding intrinsic value is the nuclear skills. “Everyone knows the price. Nobody knows the value. As soon as you control the formula to discover value, investing becomes simple.”
And the real reward, he added, lies in finding incorrect opportunities. “Is the return gap between price and value … is it asymmetrical? We are looking for asymmetrical … Asymmetricity in the efficiency – that is the excitement in the market.”
Agrawal rejected market timing as a poor strategy. “Not buying at the bottom is a crime if you are already trying to time the market,” he said. “By the time you collect the courage to come in, you have already missed 40% of the Upmove.”
He advised investors to look beyond the story and in balance sheets. “I’m going directly to 23 financial ratios,” he said. “If two companies are equally profitable, but one collects his contribution in 10 days, while the other lasts 90 days, the difference is huge.”
India and the US
Despite the growing global uncertainty, Agrawal believes that India is one of the few two countries in the world, in addition to the United States, where macro-economic growth consistently flows in the long-term return. “There are 170 markets, but only these two cause extrapolation of economic growth in share performance,” he said.
“India,” he said, “is more predictable than the US”
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((Indemnification: Recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)
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