Ramesh Damani: A Journey of Learning, and Triumph in the Stock Market
Early Days and Childhood:
Ramesh Damani was born into a middle-class family , where he
spent his formative years. Growing up in a modest household, he imbibed values
of hard work and perseverance from his parents. Even as a child, Damani
displayed a curiosity about the world of finance, often observing and
questioning his elders about economic matters and business affairs.
Ramesh Damani was born in Hyderabad, the son of a stock
market investor who had been active since the 1960s. From an early age, Damani
showed a keen interest in finance and developed the habit of reading
international press, immersing himself in global economic affairs. In pursuit
of further education, he ventured to California in 1977 to pursue his MBA.
Damani fondly recalls his father's early involvement in the
stock market, particularly during a significant event in Indian economic
history. In 1977, George Fernandes, the Industry Minister at the time,
implemented a law requiring multinational companies (MNCs) to dilute their
stake and become listed entities in India to conduct business. This led to
companies like Nestle, Colgate, and Glaxo diluting their stake to Indian
investors at low prices due to insufficient liquidity. Seizing the opportunity,
Damani's father acquired a substantial quantity of these MNC stocks at
favorable prices, laying the groundwork for future investment success.
Schooling and Education:
Damani's academic journey began in Mumbai, where he attended
local schools and demonstrated a natural aptitude for academics. He excelled in
his studies, particularly in subjects like mathematics and economics, which laid
the groundwork for his future pursuits in finance. After completing his
schooling, Damani pursued higher education, earning a degree in commerce from a
reputable university in Mumbai. After graduating from H.R. College in Mumbai,
Ramesh Damani pursued further education by obtaining an MBA from California
State University, Northridge.
Struggles and Setbacks:
Despite his academic achievements, Damani faced his fair
share of struggles and setbacks in his early career. He encountered challenges
securing employment opportunities and often found himself in precarious
financial situations. These setbacks served as valuable learning experiences,
instilling in him a sense of resilience and determination to overcome
adversity.
Entry into Trading and Investing:
Damani's interest in the stock market was piqued during his
college years, where he began dabbling in trading and investing with whatever
little savings he had. He immersed himself in studying market trends, analyzing
company fundamentals, and honing his investment strategies. Despite initial
losses and setbacks, Damani persisted, driven by his passion for the financial
markets and his desire to build wealth through prudent investing.
Ramesh Damani: A Journey of Learning, Conviction, and Triumph in the Stock Market
Story of first Investment:
Damani received a pivotal call from his father, offering him
USD 10,000 (a significant amount at the time, considering the conversion rate)
with a unique condition: he must invest the entire sum. Remarkably, his father
assured him that if he incurred losses, there would be no repercussions, and he
could retain the entire amount earned. This proposition served as a risk-free
opportunity for Damani to venture into the world of stock markets, setting the
stage for his journey to Dalal Street.
However, Damani's initial foray into investing encountered
challenges. Despite the buoyant conditions in the US stock market at the time,
he managed to lose the entire USD 10,000 within six months. This setback
underscored the importance of learning from mistakes and served as a valuable
lesson for Damani, emphasizing the unpredictable nature of financial markets
and the need for prudent risk management. It also reinforced the notion that
formal education, such as his MBA, does not guarantee success in investing,
highlighting the importance of practical experience and continuous learning in
the field.
Undeterred by this setback, Damani returned to India in
1988, accompanied by his wife and son, and embarked on a new chapter in his
career as a member of the Bombay Stock Exchange (BSE). Despite the substantial
cost of membership, which amounted to around 6-7 Lakhs at the time, Damani viewed
it as a worthwhile investment in his future, recognizing the potential to
transform his life through active participation in the financial markets.
Transition from Broker to Investor:
During that period, brokers earned a meager 1-1.5%
brokerage, whereas proprietary investors like Rakesh Jhunjhunwala, Radhakrishna
Damani, and Nimish Shah, all of whom were Damani's friends, were reaping
substantial profits with returns ranging from 100-200%. This stark contrast in
earnings prompted Damani to reconsider his approach to investing and explore
alternative strategies to maximize returns.
As an investor, Damani achieved significant gains in stocks
such as Infosys (with returns of 500x) and CMC Ltd (with returns of 40x). These
remarkable investments were made possible by Damani's background in technology,
having worked as a coder in the US. His tech expertise enabled him to recognize
the value of technology companies, particularly in the Indian outsourcing
market, where he identified lucrative investment opportunities and capitalized
on them.
Building a Portfolio and Strategy:
Over time, Damani developed a disciplined approach to
investing, focusing on value-oriented strategies and long-term wealth creation.
He carefully researched and selected undervalued stocks with strong growth
potential, building a diversified portfolio that reflected his investment
philosophy. Damani's keen eye for value and his ability to identify hidden gems
in the market set him apart as a savvy investor.
First Big investment & Achievement:
Damani candidly admits that despite his confidence in the
Indian IT narrative and Infosys' strong fundamentals, he hesitated to place a
significant bet on the company. However, witnessing Infosys' remarkable ascent,
with its stock price soaring 500 times over, made him recognize the
significance of betting big in the stock market. Determined not to repeat the
same mistake, Damani seized the opportunity presented by CMC Ltd. and took a
substantial stake in the company. This bold move proved to be immensely
profitable, as CMC Ltd.'s stock price surged from a modest 20 to an astounding
2800 in just a year. This success reaffirmed Damani's belief in the importance
of conviction and decisive action in the world of investing.
Achievements Recognition:
Through his astute investment decisions and prudent risk
management, Damani gradually built a reputation as a successful investor in the
Indian stock market. His portfolio of investments yielded impressive returns
over the years, earning him recognition and respect within the investment
community. Damani's insights into market trends and his ability to spot emerging
opportunities made him a sought-after figure among investors and analysts
alike.
Ramesh S. Damani, aged 66, has been a Member of the Bombay
Stock Exchange (BSE) since 1989, leveraging his expertise as a broker in
navigating the complexities of the stock market. Additionally, he serves as the
Managing Director of Ramesh S. Damani Finance Pvt. Ltd., where he applies his
financial acumen to provide valuable services to clients. He actively engages
in investment activities across both the Indian and US stock markets,
predominantly through his personal portfolio. Additionally, he holds the
position of Chairman at Avenue Supermarts Ltd., the parent company of the
renowned retail chain DMart.
Recognition:
In addition to his roles within the financial industry,
Damani holds a position on the Board of Directors at VIP Industries Ltd.,
contributing his insights and guidance to the company's strategic direction and
growth initiatives.
Damani's influence extends beyond his professional roles, as
he has become a familiar face in the media landscape. He has hosted several
shows on CNBC-TV18, including "Wizards of Dalal Street,"
"Oriental & Occidental," and "RD 360." Through these platforms,
Damani shares his wealth of knowledge and perspectives on financial matters,
offering valuable insights to audiences seeking to navigate the dynamic world
of finance.
Continued Success and Contribution:
Today, Ramesh Damani stands as a prominent figure in the
Indian financial industry, admired for his wisdom, integrity, and contributions
to the field of investing. He continues to actively manage his investments,
sharing his insights and perspectives through various forums, including
interviews, articles, and public appearances. Damani's journey from humble
beginnings to investment luminary serves as an inspiration to aspiring
investors, demonstrating the power of knowledge, discipline, and perseverance
in achieving financial success.
