Raamdeo Agrawal’s advice to investors in bleeding markets

As per Raamdeo Agrawal, the three essential qualities that one needs to have in the stock market are vision, courage and patience.

Raamdeo Agrawal, a stock market veteran, has witnessed many upheavals throughout his journey in the markets. Be it the opening up of the Indian economy, the scam of 1992, the dot com bubble, the 2008 crisis or the recent one being the pandemic.

Despite all these events, the marquee investor was not deterred. He kept learning from all his experiences, both good and bad, a quality that sets him apart.

As investors, we can definitely learn a thing or two from Agrawal. His wisdom on the markets can prove to be a guiding light in the turbulent times the markets are facing today.

Ever since the Ukraine invasion by Russia, the markets have been declining. The value of individual stocks, or sometimes the entire portfolio ending in red, is disturbing, compelling some to even panic sell.

So how should investors go about in markets like these?

In an interview with Value Research, Raamdeo Agrawal dropped some pearls of wisdom. He said, “In my experience, your portfolio comes back to previous levels in less than a year. You need not fear such drawdowns as these are part of the market.”

As per him, the three essential qualities that one needs to have in the stock market are vision, courage and patience. Vision for business, courage to buy the stock, and patience to hold the investment till the conviction is challenged. 

Agrawal took his key learnings from legendary investor Warren Buffet. From him, one of the most important things he learnt was to look at the ROE, rather than the EPS, and to focus on quality franchises.

Speaking about his framework for stock picking, the investor has developed a formula of his own: QGLP. This formula looks at four important aspects of quality, growth, longevity and a reasonable price.

His advice to investors can prove to be quite beneficial, especially in the bleeding markets that we are witnessing today! It would be a wise step to inculcate his teachings in our actions, to take heed from someone who has witnessed various storms in the financial markets, and made through it!