Veteran investor and market expert Ramesh Damani proclaimed that the volatility will always be there in the market, but keep a long-term view and believe in your conviction, Indian stock market is the right place to generate wealth.

Veteran investor and the king of value investment Shri Ramesh Damani was in Kuwait to attend a seminar organised by the Institute of Chartered Accountants India - Kuwait Chapter. In an exclusive interview with Indiansinkuwait.com, the billionaire investor Ramesh Damani said that the Indian economy will take CenterStage over the next few years.

Below are a few excerpts from his chat with Sunoj Nambiar of IndiansinKuwait.com, during his first-ever visit to this region.

IIK: Last year, in 2021, the market gave an amazing return, but the same is not reflected this year. What is your view on the current market?

Ramesh Damani: We tend to take a longer-term view of the market. We don't get excited to see a 30 percent up or 10 percent down. I joined the Indian market in the year 89 when the Sensex was around 600 or something. Today 30 years later, it is almost 60,000. Last 30 years, all the crisis has happened in India. Despite all this, the market has given these returns. The only message we give about a market like India is that stay invested in the market. It is not when you enter the market but how long you stay invested is that matters.

IIK: As known as the king of value investment, how do you find a value stock?

RD: India is a very wide market. There are a lot of diverse sectors you can look at. It all depends on your insights. You start with business you understand and do the basic things like a buy at bargain. The market itself has given a wide opportunity.

IIK: When you say buy at bargain, we always find the market is at an all-time high. So, when is that time to buy cheap?

RD: That depends on your bottom-up analysis. Nobody can ring a bell when it is cheap. You need to understand the business you are investing in. Suppose you are into technology; you can identify the technology companies. As you study more and more, you will identify the bargains available. Then allocate your budget accordingly.

IIK: When it comes to allocating your budget, what is your advice?

RD: I always give the classic warren buffet answer. First time you invest in yourself. Your career is your first earning point. That is the best protection of your earning part. Secondly, if you don't have time to read or study the market, the best exercise is to invest in an Index fund that tracks the index. So, when Sensex double, your money also doubles. If you have greater ambitions, you need to study and identify the best companies. Last 25 or 30 years, India has created a number of great companies, which have grown 100 or 200 folds.

IIK: You just mentioned that India has created a number of great companies in the last 25 or 30 years. However, these days we have seen a number of new-age companies with huge valuations, which doesn't look realistic. How do you rate this valuation?

RD: These new-age companies in India are overpriced because of the global froth in these companies. Now they come back to reality. Some of these companies have a very good business model. So, they will come back once the valuation becomes reasonable. It is the job of the analysts to make sure that he is not buying something which is way overpriced. The market cap should be supported by the business to identify whether it is overvalued or not.

IIK: When we all say about India's growth story, last few months, we have seen a huge exit by FIIs from the Indian market. Why is it happening?

RD: They are selling when the interest rate is higher in their domestic market, and it is more attractive to park their fund in that market. Unlike any previous corrections, this time, the domestic investors are fuelling the market because India today is in a sweet part. There are this three D's - Democracy, Digitalisation, and Demography - which is going to fuel India's growth. We have a stable democratic government, which is very important for the economy to grow. The Digitalisation India is witnessing will properly India as the back office of the world, and on the Demography side, India being the youngest population, will also propel the economy to the next stage.

IIK: How does the increasing number of domestic investors in India drive the market?

RD: Domestic investors are buying. There is a lot of money coming as SIP every month. So look at what happens when the market starts outperforming. At that time, the foreigners will come back to India. So, the true bull run will happen when the foreigners start reversing their decision, and I don't think it is too far away. At some point, when Indian companies start outperforming, foreigners have to take a second look and start investing in India.

IIK: Where do you find NIFTY by the end of this year?

RD: That question can only answer by some astrologers, but I say with all my conviction that the next 30 years promise to be exactly like the previous 30 years.

The most important thing is we have a very stable government now, so the policies are stable, unlike a coalition government. Now for the first time, India is exporting more software than importing oil. There are a lot of government schemes like sanitation, and housing, which ultimately improve productivity. The government is doing its best to try and make this more sustainable to become an Indian century.

IIK: For most of our readers, the NRIs, the usual investment habit is bank FD or real estate. What is your message to them?

RD: In a bank FD, we usually don't beat the inflation rate. And it is perhaps for those who are deep into retirement. There will be volatility n the market. A smooth ride is never expected. But if you have a five-to-ten-year period, it is the right time to have an exposure to equity.

IIK: Now, the people are started looking into equity investment, but most of them are new to this. What advice would you like to share with them?

RD: You have to get more knowledge about the market. The best thing is to invest in an index fund. Getting rich is not easy. If you want to get rich in the stock market, I suggest reading and getting more knowledge about it. You need to spend your time and effort for creating wealth.

India is like a buffet. There is a lot of stock to buy. You can study about the company. I can only say with some degree of confidence that the last 30 years have been an extraordinary golden period in Indian equity, and the next 30 years will also be the same way.

IIK: Finally, which sector you are bullish on this year?

RD: I like technology. India is like a plumber for the rest of the world. We are programming the apps for the world. There are also companies in the defence and railways with their cheap valuations. There are a plethora of choices like pharmacy, speciality chemical etc.. It is up to your conviction and decide which stock to invest in to generate the wealth.

Ramesh Damani, who is always bullish on India, also urged the NRIs to be part of India's growth story and start investing as early as possible to generate wealth. It is something that one must stay invested in, he said.

"Ride through the volatility. Find good quality equities and look at investments from a 30-year perspective," Damani concluded.