Raamdeo Agrawal, the Chairman and Co-Founder of Motilal Oswal Financial Services, provided the following key insights on the pre-budget market conditions:
The market is an “approximate machine” that goes up and down in an unpredictable manner. It may go up 5 steps, then down 4 steps, then up 7 steps, and then down 4 steps.
For long-term wealth creation, investors should not get too fixated on the distinction between large-cap, mid-cap, and small-cap stocks. What matters is that the company keeps generating earnings, regardless of its market capitalization.
If a company keeps making losses, it is only worth a small amount (e.g. 5 dollars), regardless of who is buying it. The key is for the company to achieve a single significant accomplishment that makes it a top 10–15 company in India.
The market will always have supply-and-demand dynamics. When prices rise, supply will come in, whether from foreign investors, domestic investors, or promoters selling in block deals. This “inhalation and exhalation” is a natural part of the market cycle.
In summary, Raamdeo Agrawal emphasizes the importance of focusing on companies that can consistently generate earnings rather than getting caught up in market capitalization classifications or short-term price fluctuations. His decades of experience in the Indian stock market have provided him with a unique perspective on long-term wealth creation.
