Ramesh Damani and his remarkable Investment Journey

The India of today is similar, yet too different from yesterday's India. A lot has changed, especially in the last few decades. From being a country that was earlier looked at with pity, the "New India" has shown the whole world that it is a nation that cannot be taken for granted.

It won't be wrong to say that the LPG policy has been the string back behind this; this led Indian companies to stand shoulder to shoulder with the other big giants of the world. Yes, the policies of Liberalization Privatization and Globalization, have uplifted the whole Indian economy, and probably had the best impact on the finance sector.

It was only after 1991 that people actually started taking up investing not only as an extra activity but as a real-time career. Many big names of today started emerging at that time. 

One such great name who had his first big move right at that time, in 1993, was none other than Ramesh Damani, the investing giant. 

So, how did he come into the investing world? What convinced him? How did he become one of the best investors? What's his success story? 

Let's dive in!

The early life of Ramesh Damani

Well, the tale of Ramesh Damani is unlike those typical stories where the successful investor comes from a poor background. Ramesh Damani came from a well to do family. His father was already into the stock market for 20 to 30 years. Senior Damani was able to earn a good income for his family, such that he was able to send his son to the USA for higher studies. 

Ramesh Damani is the founder of a company called Ramesh S Damani Finance Pvt Ltd. He holds a Bachelor's Degree in Commerce from HR College in Mumbai and a Master's Degree in Business Administration from California State University. He did not have any interest in the work where his father was indulged, which was the stock market.

But, destiny had its own goals. Ramesh Damani was the only son of his father. Therefore, his father always wanted to bring Ramesh back to India so that both could stay close to each other and gradually, he too could start investing in the stock market. 

Ramesh's father attempted many times but failed to convince his son to invest in the stock market. Finally, he tried another trick to convince him.

Ramesh's father had sent 10,000 USD to his son and had said "Take this money and invest it. If you double the money, it is yours; but if you lose, no questions would be asked." However, there was one condition; Ramesh had to invest in the stock market.

Ramesh Damani agreed to the bet and invested the money given by his father in the stock market. Unfortunately, he ended up losing the huge sum of money within just 6 months of the period. But, as was promised by his father, Ramesh wasn't asked any questions after this loss. 

Senior Damani, disappointed that his big bet had failed, somehow, started to think that his son wasn't made for the trading world. 

But Ramesh Damani didn't think that way. Ramesh Damani was livid and frustrated. "How could an MBA graduate from a prestigious USA college lose money and that too in a bull market?" 

It harmed his ego, and at that very moment, he decided to take his first active step into the world of the stock market.

The Investing Story of Ramesh Damani

Equipped with a Master's degree from California State University at Northridge in 1989, Ramesh Damani became a Bombay Stock Exchange member. He had intended to make a living through broking, but what really fascinated him was specifying potentially successful businesses, and then investing in them for a longer time period. 

Damani's father had been profitable in the market, but he always sold the stocks the moment their prices went up. Talking about his father, Ramesh Damani had once said, "He always created income for the family, but never wealth."

During 1989/90, the market was going through a massive bull phase, which was known as the Harshad Mehta bull market. Ramesh had made a lot of money for his clients, but he would get only 1% in return. Some of his smart clients had made profits up to 100%, so he decided to invest for himself, once the bubble burst and everything was back to normal.

Ramesh's first big move was in 1993 when Infosys got public. As he worked as a coder in the US, he knew Infosys would profit him from huge labour arbitrage. He invested a whopping amount of Rs 10 lakh in both Infosys and CMC. By 1999, his investment had risen hundredfold.

In 2002-03, just before the last 'bull-run' had started, Damani was bullish on the liquor industry. "It was incredible; the entire liquor business in India was available for Rs 500-odd crore." His investment was a great success and had paid him off handsomely. 

He also identified two public sector companies, Bharat Electronic Ltd and Bharat Earth Movers Ltd, and got in early. And he admits guilt over not buying enough of those.

Portfolio Holdings

Unlisted or listed companies, Ramesh Damani, has investments in both types of companies. Damani is well known and appreciated for high-quality value picks, which could be retained in the portfolio for a longer period of time. He pursues the Warren Buffett model of investing, which promotes companies with strong management credentials and processes. 

According to the latest corporate shareholdings documented, Ramesh Damani publicly holds 2 stocks with a net worth of over Rs. 203.7 Cr. 

Lessons to be Learned

The first big blunder that happened in the life of Ramesh Damani was in the USA when he had lost 10,000 USD. He was buying shares looking at a rearview mirror; which means that he was looking at the previous bull market and buying stocks which have fallen. Damani took that as a bargain. 

However, all fallen stocks do not certainly give you a good bargain. That was an expensive and of course a crucial lesson. His father understood that losing money is a part of stock investing and the world of trading. 

Ramesh Damani also regrets not buying aggressively when the markets crashed in the recession of 2008. "I had anticipated the fall and was 30 per cent in cash. By the time I started buying, though, the market had already run-up," he had said. 

Since then, he hasn't allowed himself to feel many regrets in his life yet.

Ramesh Damani had made a lot of wrong mistakes as an analyst, and it was the lessons from the same mistakes that had helped him in the next 30 years of his life. 

"There are no losses, only lessons learned", he says.

Final Words

The stock market is not about the hit and trial method, but about the analytical skills, one possesses. Ramesh Damani is among the list of those successful investors who learnt from their mistakes and used the lessons learned from them, to attain new heights of success.

Despite having a prestigious degree and a well-paying job, Ramesh Damani realised the potential in the stock market and decided to not limit himself to a regular job.

However, one must not forget that like Damani; one needs to have the right analytical skills, knowledge and the foresight to understand the trading world. Successful investors don't just jump in the world of trading depending on their lucky stars and are always prepared to take risks and face any losses as well.

And this is one of the most important qualities any investor or potential investor must-have.

Happy (and smart) investing!!