Ramesh Damani has spent 30 years investing in India. He believes the market will continue to grow. He’s confident the Indian market will keep growing. He says, “The best is yet to come.”

Rakesh Jhunjhunwala and my mentor, RK Damani, taught me to be bullish about India and that it is a growing country. I owe them a lot.

You see the big picture and identify companies before trends. I tried. When I returned to India in the late 1980s, cement shares were the trend. Then I realized you make money in big moves. You have to find them. We got the tech trend right. Then, I tried to follow each bull market and spot the leaders.

I’m learning how to label this bull market. How do we label this bull market? I had an idea. The label would have helped the Indian middle class. That’s a great story. The new book is good. I’m going to read it. It’s called The Middle Class by Homi Kharas. He says the middle class started in England in the 18th-19th century and is still around today. He says 4 to 5 billion people are middle class. Most middle-class people are from India.

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The middle class in the US has about $12 in spending power per day. This is above the poverty level of $2 per day. This means they can save, invest, and do other things. India’s GDP has reached $2,500, and its middle class has grown. They want action on climate change, travel, education, and living standards.

What’s wrong with this market? We can argue either way. What do you think?

This market is right. The market fell a lot in the last few days. India had about 13 crore demat accounts in the previous three years. They’re optimistic. But they’re trying to understand the market and the difference between risk and volatility.

The risk is losing money. That’s all. The Sensex can go up or down 2,000 points, and people are still trying to determine what will happen.

An astrologer can tell us what will happen. The following 20,000 points on the Sensex will go up because of India’s population, digitalization, and democracy. The market is doing well.

What’s wrong with the market? A bull market leads to overvalued stocks and excessive confidence. Sometimes, essential regulation changes are overlooked because the market is doing well. 

PSUs are still the market leaders. Keep investing. It’ll get better.

How are you investing in this market?

I’m invested, but I need more money. I usually put 5-10% cash into the bull market, but I’ve been putting all my money in. There’s reason to be optimistic. I sold my public sector stocks, and they did well. The Modi government did well with the public sector, which was hurting the Indian economy. People should have known the government would use these public sector units to expand capital and that they would have to pay 30% of their dividends.

Two or three years ago, you could get these companies at today’s earnings and a 7-8% yield. That was a good deal for investors.

It’s a good place. I’m on this, including after what the prime minister said in Parliament. The Indian Prime Minister said stocks are a good investment. When did he say that? It’s happened before. We were happy when the prime minister said that.

What do you think the markets are wrong about?

It’s a tricky question. I pick stocks. Some top companies are well-managed, have low debt, and have stable earnings.

Charlie Munger died recently. He was asked the same question. He said Berkshire Hathaway fell 50% thrice during his 40-50 years with the company because that’s how the market works. We can’t. You need money. Risk means losing money. Many Indian businesses need to improve. I can name some from the tech boom in 2000. But there are good businesses in India. These include public sector stocks, BPO businesses, and IMEC corridors. These will make money and help customers over many years. If you’re young in India, invest. India might not double in three years, but it could in four. It’s the best place for young Indians. What should a young Indian do with money at 30-35? You can’t do it in gold or cryptocurrency. Should you invest in stocks?

In 1991, the index was 1500. It’s about $75,000. Look at the journey. You made 30-40x on the index. How well you did picking stocks is still being decided. India is doing well. India is a democracy, its population is growing, and its middle class is expanding. By 2030, 500 million people will be middle class in India. India’s economy is growing fast. It will slow down when it gets big. Incomes will range from $10,000 to $15,000. Many will earn more. This will drive growth for years.

We are the best country in the world.

China’s population is expected to grow from 1.4 billion to 800 million in 30-50 years. Korea, Japan, Italy, and China are facing the same problem. India’s population is still growing, so the next 20-30 years will be fine.