BQ Edge | First-Time Investors Must Learn To Live With Greed And Fear, Raamdeo Agrawal Says
Masks. (Image: BloombergQuint)

BQ Edge | First-Time Investors Must Learn To Live With Greed And Fear, Raamdeo Agrawal Says

The year was marked by greed and fear and first-time investors should come to terms with such a quick change in fortunes, according to veteran investor Raamdeo Agrawal.

Equity benchmarks swung between decadal highs and lows in the last six months. And this roller-coaster was triggered by fears about the impact of Covid-19 pandemic, not the impact itself, Agrawal told BloombergQuint’s Niraj Shah in an interview. Now, greed has started to seep in as people expect the markets, already at record highs, to be much better than everyone thought a few months ago, he said.

The first-timers and those who entered right at the top, say two years back, and have seen a decline, they’ve had a terrible time, he said. “They’re not able to explain what hit them, and they are blaming the managers and all for their losses, but this is the nature of the market.”

The advice from one of India’s most successful stock pickers comes as the pandemic created a new breed of retail investors who jumped into the market using platforms of discount or low-fee brokerages such as Zerodha. Called ‘Robinhood’ investors, after the U.S.-based no-fee trading app, they flocked to the market as lockdowns forced people to stay indoors.

They flocked in to ride the rebound from the record selloff as central banks and governments globally announced measures to support the economy by cutting rates and direct support.

According to Agrawal, the global macro is too complex. The world is awash with liquidity and the role and strategy of the central banks are crucial, he said, adding that the cost of money will be the biggest thing to track.

What this cheap money does is make finance available to the governments and companies for whatever plans they may have, Agrawal said. “With interest rates at zero globally, the world is now one bucket.”

Yet, unless an enabling environment for growth is created, the money will not come to India, according to him. If growth returns, he said, will percolate down to a broader set of stocks. Already, according to Agrawal, the benefits of the lower rates are now visible in second-quarter results.

Low rates don’t leave a choice for investors but to invest in return-yielding assets like equities, Agrawal said. But to generate returns, investors have to bring in discipline because they are up against the most-disciplined instrument, the index. That discipline, he said, is not to try and time the market—it’s a waste of time.

In my morning walk, I ask people to give me a recommendation for today, only today. 80-90% of the people get it wrong.
Raamdeo Agrawal, Chairman, Motilal Oswal Financial Services Ltd.

Also read: S Naren Explains How To Survive The ‘Central Bank Bull Market’ Climax

If people live by the screen, day in and day out, timing the market would be possible, else it is a mug's game, Agrawal said. That goes for cyclical sectors that live by their reputation, he said, advising investors against timing cyclicals or stocks that move up and down with economic cycles. “It’s a very difficult thing to do. If people want to play cyclicals, and deep cyclicals at that, it’s best to do it very selectively.”

A few sectors are creating wealth, he said, and to broaden the rally, the government can try and incentivise the housing sector.

Watch the full video here:

Also read: BQ Edge | Chart Advise’s CK Narayan Sees Limited Upside For Nifty 50

Here are the edited excerpts from the interview:

How are you viewing this whole year at large because 2020 has compressed a lot of decades into months. We’ve had learnings of which we could have learned over a decade in probably a month-month and a half. Now we have this U.S. elections as well, which is going on. How do you view this year, thus far?

This year is on, it’s not over. So, we have seen the all-time high an all-time low. I mean, a decadal high and a decadal low in the last six months. So, this healthcare scare—and anything can impact the stock market. So, the kind of panic which we saw and the intensity of fear actually it played out right in front of me. The intensity of fear of Covid and then Covid itself. Covid was very small when the market crashed. Actually, the day on with the market made a bottom, that was a day one of the lockdown. Can you believe this? On 23rd March, that was day one of the lockdown and that is the day on which market bottomed. The cases were less than hundred cases on that day. There only two emotions in our market, greed and fear. I saw only the fear playing out. At that time it was not the event, it was the fear of that event, the fear of what could happen to the world economy, Indian economy and to the lives of the people, as if the whole world is going to break down. So that intensity of fear lead to the collapse and now the greed is slowly seeping in. Now, greed is like, a sector by sector like yesterday in banking. Now the greed is taking over what is possible on the other side. To see both greed and fear playing out in 12 months is quite a fun to watch. I mean it is completely an amazing experience for those who are keen observers of the market. Because of my experience it allowed me to not being impacted. For the first timers and those who entered right at the top say to two years back and first time they have seen decline. I am telling you they have had a terrible time. They are not able to explain what hit them, and they are blaming the managers and all for their losses, but this is the nature of the market.

What I was saying was that, I don’t remember the date but I do remember that somewhere around April 1 week or thereabouts or maybe March last week, you had said who knows the 7500 could be a bottom? So, those are famous words, the famous last words in an opposite way because it did turn out that way. I heard you mentioned that now you are seeing greed seeping in. I am not asking you to make a prediction, but does that worry you at all?

No, there is nothing to worry in the market. This is like the cricket season. I mean, how good is a bowler, how good is the pitch, it does not matter—you just go out there and play. It is all given in a sense that, whether it is Biden or Trump or whether it is China or Pakistan, whether it is a bull market or a bear market you have to go and play. You don’t have a choice of not owning a stock or those kinds of things. So, I have seen all kinds of things. This is fun, whatever constraint you give we will play.

So, let’s ask you what’s the nature of the picture according to you. I mean, the global scene as it is looking like now because we have this big presidency game and, in this week, it went almost unnoticed what Jerome Powell mentioned in the Fed meet as well. So, what do you make of all these things?

See this global macro is very complex yet very important. It is important but can’t understand, can’t make a head or tail of it, in a very clear way that this is how things should work or will work. It is very tough to say because it really is complex and very large, and yet very important. So, you cannot ignore that but you don’t have an edge in understanding more than what is written in the newspapers. So, basically, it looks like the world is awash with the liquidity and the world is far more global now than ever, particularly in the capital movement. I think it is truly global. I remember seeing India transiting into the global world, say, in1991-1992—the first time I went out of India, in 1993-1994, how the internet and everything has made it so global that today doing a transaction in any part of the world, even for an individual sitting in India, sitting at home has become literally friction free. So, I think the global capital markets and the role of the central banks, they are bigger than God. Mr. Powell, somebody in Japan and China, we don’t know the names, but these guys are bigger than Gods I can tell you this, central banks. I think we must read a little more about the central banks, what they can do. We can think about a corporate strategy but what is the central banks’ strategy? The coordinated effort of the central banks, they all work in coordination at one level so what they can do in this pandemic kind of environment. The kind of size of the liquidity and the cost at which it could be available because assets are all discounting and compounding machines. So, the cost of money and the availability of money is very important. Right now, I am cutting across all the kind of stories but I’m just saying that the role of money, cost of money is going to be very important with the globalization of the capital markets, the globalization of fund flow and more than your trade flows. In zero interest rate scenario, if India can offer3% guaranteed dollar return, you can get as many trillions as possible you want forget about billions. Who is there to guarantee you that? So, the issue is that this is a crazy world. Now, it is all the question of strategy and your determination. The determination with which the Chinese are moving to build their country, we need to move with that determination. We can build whatever we want to build, because there is no dearth of money anymore. You cannot say that I’m a poor country. No, that argument is gone. If you have great ideas and great execution, unlimited money is available.

Everybody discusses that Donald Trump’s stance on China Pakistan, India-- the friendship that he and Prime Minister Modi had was ex. Would Joe Biden come in and change that equation. Do you bother about that having an impact on the markets?

It is important but not knowable. Knowable and not knowable—this particular framework has to be understood. Knowable and not knowable, important and unimportant. Unimportant and knowable and not knowable, doesn’t matter. In important, there are two things, knowable and not knowable. People spend 99% time in unknowable, important but unknowable. So many friends they have been watching the U.S. elections, they don’t know the name of the states. I mean, why are you trying to figure out? Those Americans themselves have not been able to figure out for the last one week. I mean, you don’t knowhow many seats are there in Bihar. What I’m saying is that this is important. Of course they will have policy actions which will have an impact on us but they are not knowable, what they will do. That keeps me simple, I didn’t miss one single walk in the morning, I just went on every day.

So, the follow up then because you mentioned that it is very important to figure out that maybe the central banker is the true keyperson in current scenario. You mentioned a very important term, Mr. Agrawal which is this unprecedented liquidity scenario. Can you kind of talk about the impact of that on both? One equity markets and the money that comes in from buying assets, but two, the quantum of money available for corporates to set up projects and because of the lower interest rates, the IRRs that are anticipated and how big of a change could that be for corporate India manufacturing infrastructure, etc. Do you have some thoughts there?

It is very long. I mean this machine keeps going on and on. Everything is interlinked. The moment cost of money is there and low cost of money is there, you always have a stable government. Then, you are in reforming mood. Then you have the China problem, and you can stand up against China, only if you grow. I am telling you; the world doesn’t care where India is if you are not economically capable of standing up to something which is being challenged. Now, without an economic mind, you cannot have a military mind. You can have a very sharp strategy, but you need to put out firepower. That can come only with money and money can come only if you grow. Now, you cannot confuse growth with ideologies- rich and poor, urban and urban poor and all sorts of this vote-gathering machine and all. That must go. On a single point focus you must get growth, even at a cost of inflation because if you don’t grow at a 10% in next five 7-10 years, this is the window for India. You’ll see the moment you start growing even if you are one fifth of the size of China today, you can still stand up because the world will be on your side. The world’s sympathy is with you but you should also be doing your bit of it. So, my sense is and this more than me, I hear the things of what is coming from Delhi. My sense is they are getting the message that this is imperative now and we have had enough of side-tracking of the economy. But I think with economy, we’re in the front. Now, with this kind of a thought process there, I’m just assuming, I’m an optimist so I’m assuming like that. If that is there, then a very enabling environment has to be created. Because investors, yes they are looking for opportunity, but they’re not duty bound to come to India. It is not my birth right to get global money. I have to provide that platform. In fact, I would say, we call it an unlevel playing field. How does the water flow? Water flows from top to bottom. If my coding cost is $60per hour, who will come from America to India? But in America the coding cost is $60 and in India it is $3. So obviously, all of the coding will happen in India. You don’t have to do anything, even without electricity, Infosys and TCS and Wipro was made provided the level playing was like an unlevel playing field. This is the opportunity to for this to be a $100-$200 trillion global savings pool. The moment you create this as a unlevel playing field, every water should come on this side. We should become reliable and we should be really friendly to them. They should not be looked upon as a bakra. So once that attitude changes of the bureaucracy, the politicians, local citizens, local industrialists, I think if we all play together to build this country, there is nothing which can stop at this juncture. So, what I’m saying is this all this connects. Now what all will happen, that I don’t know. I mean, we could have a very socialist attitude to block all the inflows and only bother about say domestic investors. I mean, domestic investors and global investors they should be treated as, atithi devo bhava and investors devo bhava. That should be the attitude, if that attitude flows from the top, if it flows from the top and then gathers momentum at a state level, which is very important. As a team, very orderly guys can put up wonderful shows. That’s opportunity here and what happens is as an entrepreneur I’ve seen, once you test success, success breeds success—even in economies, leaders. You see the history of Singapore; you see the history of China. They got success somewhere. Like, our own software success story. We were ready but nobody bothered about India till 1995-1997 and then Y2Kopportunity came, we delivered. Once we delivered you see today nobody does Y2Kbut today we are the $150 billion export machine. So, we have to replicate that in a few more sectors and it is possible. So, what all will happen, I don’t know.

I heard you mentioned that you get a sense from Delhi that they are getting the message. This whole angle of PLI are being provided to a few key sectors, etc. is all that the right messaging, do you think?

Yes yes, anything to do with the growth. I’m not brilliant guy to say that do this, but the broad direction has to be right. Whether you do it and whatever because there is a lot of intelligence in Delhi. There is no dearth of intelligence, there are economists, officers, thinkers—there are many people. The issue is, is the goal what you’re seeing, the direction right. That 10% GDP growth is that goal. Are you going there or are you going to 5%? That is the difference. The strategies can be multiple strategies. If you want to go to Pune you can go via Panvel or via BKC. That is not important but what is the goal? Say, the Prime Minister has said $5trillion by 2024. That said, everything else is negotiable but this is not negotiable. $5 trillion by 2024, just do it by hook or crook. It’s a very clear strategy that let’s achieve this. Then once you achieve it, or once you start achieving it, you’ll see the target going to $10 trillion. Then the fun starts. I am telling you, if we keep growing even for two years by 8%, we will not have time to talk to anybody. I mean, the boom and the size of the boom will be so big because the cost of money is very low. What is the alternative? Where do you go? Zero interest rate globally and the world is now one bucket. My inflation differential is 3-4% so if there is zero interest, I will have 4-5%and my short term will be 2-3%. We have never seen the cost of money the way it is today, 3 ½ %. You see the quarterly results, interest costs are down by 50%,40% top line goes zero or 5%, interest costs are down by 30-40, 50%. Net profits go 30%. Free cash flow to the profit is like 200%. I mean this is unprecedented what is happening because of the liquidity and the cost of liquidity. If it remains sustained.

One is the government-enabling sectors and businesses to become better, the other is whether this whole time, China plus one narrative is real and whether companies on their own are actually making an effort to get more orders and are naturally getting more orders. In your conversations with companies, you get a sense that corporate India is favorably placed for capturing the China plus one opportunity?

The companies which are in the relevant businesses they are doing. You don’t have to help the Indian ones. The moment they have the profit-making opportunity, they will set up factories right on the top of your house I’m telling you. They’re such crazy guys for the profits. I mean they’re willing to manipulate the system to make profits at a cost. So, I mean, you to just give that a go, that piece of sweet and they will all come swarming. So, I think the government’s job is not to really hand hold anybody. Just like the PLI scheme is there, let the guys apply. I mean they have to just keep giving the rules of the game. They are more like a referee; they’re rule setting body. That’s how I see it. If you want to go to hockey game, this is how the games will be played but then the private sector and global public sector and MNCs, they will come and jostle you. You create the jobs, how does it matter who is the boss? Whether it is TCS or Amazon or Google, how does it matter to me as long as a job is created in Bangalore or Mumbai.

Whether this whole debate about whether the markets are looking expensive and should there be a correction or whether this is the start of something big because of all the factors that you mentioned and do you see evidence of that in the quarter two numbers because you gave me a hint of sorts about how this quarter is looked really favorable because of a number of things?

See, price is what you pay, value is what you get. Value is also divided into guys, the buying and selling guy. Who sells? Who thinks that this is worth 10 bucks, the price is 11 so I’m selling it. The guy who’s buying, he thinks it is worth 22 or 25 and then he’s buying. So, the value is also in the beholder of the share and his expectation of the future. So, if I have a bullish mindset so my thinking for a lot of good companies will be different. For somebody else, it will be that he’s in a bearish mindset.

So what is your thinking?

I’m am positive, you must be getting the vibes and my track record is right at the top of the market and bullish at the bottom of the market I’m bearish, so be careful.

That’s not true, actually, like I said, at 7800 or thereabouts you had mentioned that who knows if 7500 was the bottom and it turned out to be that way.

Let’s set it right I didn’t predict. I said it because everybody was saying that I said, like I can see that it is up by 500-700 points it could be like that but I was feeling a little relieved in terms of the fear and I still see the guys who successfully sold at 9500, they still have not come back to the market. I don’t know when their field will subside.

If you were of the belief that it was good, you could find value at those levels. Are you finding lot of pockets of value in the current time? Forget the levels but are you finding value?

I’m always fully invested. So, I have to find one idea in six months or in one year. So, a perfect QGLP idea, I have to find one in six months. I cannot execute even that, I am telling you. So for me, it is very different-- I’m telling you that you have to bring your own discipline because you’re up against the most disciplined guy called the index. If you’re in discipline, the undisciplined guy can never beat a disciplined guy.

A very interesting point that you told me yesterday was when you are looking back at corporate India history for 20-25 years if I’m not wrong, you mentioned that. You’ve seen that there is an X number of sectors which are probably doing really well versus a number of sectors which did that previously and money making opportunities, maybe for now to be narrower if I didn’t understand you wrongly. Could you please talk about it.

I am doing this for the 25th year- the ‘Wealth Creation Study’ for that we are running 25-years of data. Now, thanks to the computing power in a jiffy, 4000 companies can sort any data. We have maybe a500-line data for 4000 companies for 25 years. I mean the way it does the sorting; it is really humanly impossible. You cannot do the sorting in your brain when the results come. So, in the 40 groups that we have put it, what we realised is that the country’s performance in terms of economic front reflects in the number of industry groups doing well. So, there are 40 industry groups but in 2003 to 2008, when the super bull-run happened, almost 33 to 34industrial groups- they did better than the market in that period of three years or five years, whatever. Then, if you keep doing that data series, you realise that it used to be 20-25 before that. In 2002 or three, it was about six or seven groups, it was one of the worst markets, I remember post 9/11. So, it was six or seven groups. Now, in 2020, it is only six industry groups which are doing well. Again, we can count it without reference. IT, Pharma, Consumer, Private sector banks and Auto—just five groups, the rest are all flat. So, the corporate profit the GDP which used to be 7-8% in 2008-2008 has collapsed to less than 2% now. So, it’s all a bucket. Why am I saying that 8% is required? When you do 8% the bargaining power of the industries with rest of the suppliers, they go up and all sorts of money is being made by all the guys. So, we need to go back from 6 to 32 in next three four years and the conditions are so bad of the profitability, that it can only go better from here. You see the second quarter results is giving me some kind of a connect that a lot of things have happened, interest costs have collapsed, your deposit rates have collapsed, global money has come in. Your $560 billion of reserves are burning by $5 billion per week. So, all the central banks are printing and dumping it in India, because here you can get 3-4%. Then, what do we do? RBI buys and again we buy back their own bonds. We are re-exporting them. So, this is fantastic, they are issuing a zero rate and we are giving them 3%. So, money has to come here. So, a lot of these things are intertwined. I am not very good in global macro, but I can see these trends, these are going to be crazy.

Where are the themes or where are the spaces where you believe things should be done in order to engineer this move from six sectors to thirty sectors because some sectors have this compounding effect, multiplier, the networking effect of sorts. Where should that be?

That is where the portfolio design is required, and your own understanding is important. See, which sector or which company, let’s not make it to top down but bottoms up which are the companies which have their own strengths? Like one of my managers said, it is a K-shaped kind of a situation. Half the companies are going down and half of the companies are doing very well at the cost of the other half. Winners at this point of time have recovered very fast and the losers, they’ve broken down. So, you must make sure that you’re sitting with a winning sector and a winning company. There are category winners and winner categories.

I was trying to ask was that if you are saying that we need to move from five or six tech sectors performing to maybe 30 sectors performing, it would need maybe some spending and some economic cycles happening in other spaces too. I was wondering if the government can engineer some activity in three or four sectors which may help housing for example.

Housing and Infrastructure, in my opinions there are see three balance sheets. Government balance sheet, corporate balance sheet and household balance sheets—yours and mine. Our main capital expenditure is what? We put all the savings in the houses. So, we must make housing affordability so good that there is no import content in that. Steel, cement, labor, plywood everything is home. So, once you make it affordable like what Maharashtra government has done, cut the stamp duty from five to three, wherever it is possible give the permission. Once you create the job situation housing and job situation, then what will happen is, all the houses will go for mortgages. So, they will go to the banks and banks will lend them and banks will go to the depositors. The issue is that economic engine and the trickledown effect and then other side government should start the infrastructure spend. So, both of them once they start doing it, corporates will supply you whatever you want, because it’s all in the private sector. You don’t have to go to corporate instead, the focus shouldn’t be on corporate the focus should be consumer. Corporates are badmaash I am telling you. Corporates will deliver it to you and they will be able to make profits if the opportunity is there. If you don’t create that opportunity, even if you make them say if there is an opportunity say the theatre. For theatres, even if you give away tickets for free, if nobody is going to go anyway, what will you do? If it is crowded he’s not going to come and ask for anything. If all the seats are full and a ticket is selling for a thousand rupees, why does he need any help? So, like Bhargava saab said, two months back, we want a tax cut. Today, they’re saying please don’t give us a tax cut because we don’t have cars to sell. So, the investment will come. Automatically corporates are duty bound. You don’t have to ask them. The guys will come from China, they’ll come from Japan, they’ll come from Europe and America. Everybody will set up factories, the moment you’ve started the engine of demand. That’s my sense but it’s a much bigger subject, I’m sure the government guys understand.

You mentioned banks and what they are willing to do. You always held this belief that the private banks will score over the PSUs over a period of a decade, etc. Do you think in this post-Covid world that phenomenon has gotten accelerated and what’s your outlook in general for banks and financials quarter three, quarter for next year because of this whole NPA recognition?

The lending business is crazy. It has again proved that unless you know how to do lending and collecting, it’s a mastery. Lending is very easy. You can throw 10 lakh crores in no time but collecting is bigger than lending. The good guys, they don’t lend only if they cannot collect. That’s why their balance sheet goes slow, a lot of people call them conservatives and that’s where money is. So, you have to be very careful, it’s a double-edged sword, the guys who are like the hyper guys, they can lend very fast but they can destroy the company also very fast. So, this one has taught us you see yesterday what happened it was a very interesting day. One bank which went all time high was HDFC Bank, the only bank. So that proves the point that where is that sanity? This is happening despite that there is a historical change of a CEO, it is going with a new CEO. What I’m saying is that strength has to be visualised and it has to be seen to be kind of recognized. So, what I’m saying is that value migration from public sector to private sector is going to happen at 10 times more speed because the competency to lend and collect is not there in the public sector. They are brilliant guys, I am not doubting an individual’s capability but the working environment and the risk aversion—it happens. The way if your government, there is nobody to own your failure. In businesses, without asking any questions, you should be allowed to fail. That’s the first rule of law in business. I mean yes you get rewards for what you do well but when you fail, there should be somebody to give you a cover. When you say the risk of the business, that is the risk. Now, that risk, who is going to underwrite it? The sector, they will go at risk averse in lending. So, risk aversion is not going to work. You have to embrace the risk but in a very calculated fashion. So, migration is going to happen. The guys who have the capital and the competence and courage will lend. Now see, these are disconnected things. If the economy grows at 8-10%, you need 20% growth in the credit off take, maybe 25%. Credit intensity of the next $3 trillion will be double of our first $3 trillion. So, right now you have 100 lakh crores of commercial credit. In the next 7-8 years whenever we go to $6 trillion, you will need to underwrite 200 lakh crores of credit incrementally. So, who’s going to underwrite? Only the good guys. Now you have said that this guy will do that but where is the accreditation? So this is crazy Covid thing. Covid has changed everything in every sector. The guys who have not been able to handle this Covid challenge well, the market will ignore them for a very long time. Till they prove that boss, we are good enough or there’s so much of a boom, that there’s so much of cue with the good guy, that even bad guys they start doing that. That’s how the boom spreads.

The traditional investing theories always say that growth at reasonable price or everything is good for a particular value. I’m using price and value interchangeably. So, isn’t the market already pricing in the qualities not the future growth. The fact that HDFC Bank for example will be able to grow faster. I am not saying whether HDFC Bank is a buy or sell but do you think the market has started priced in all of that and therefore, is the risk reward, probably favorable in some of the second tier ones in banking or pharma wherein they might grow or they might have the capability to grow and they have still not been priced in and therefore the hard work that has been put in by the investor is much tougher now?

The market is very smart. They have priced in everything for everybody. It is all relative. You will be amazed how efficient is a market in the short-term basis. I manage a 25-stock portfolio. The benchmark is 50. Yet, every day, either we are 10 basis points ahead or 10basis points behind. I don’t know how it works. My names are different, my allocations are different. I buy mid cap small cap large cap everything. I buy in a massive 10% allocation and allocations are different, the names are different, fewer stocks are there and yet the damn thing is just about matching. How efficient the market is can believe on a short-term basis? On along-term basis the outcome is going to be very starkly different. So, what I’m saying is, the market knows everything. We are far less smart than the markets. We are not as smart as how much we think we are smart. I mean it is really humbling to manage public money in last 10 years. It has been particularly very humbling in the last two years to three years. When you underperform, you learn a lot.

Is there is there a theme or business momentum that has surprised you positively which might last for a few years? I mean a lot of people say that India could become the pharma manufacturing hub of the world, specialty chemicals are getting a new leg, there are newer sectors emerging electronic manufacturing etc. Anything that has surprised you positively?

I was stunned when I saw the IT performance. It was 1%of total corporate profit of 1995. If the total corporate profit is one lakh crore, 1000 crores from IT companies all put together. Now, I am talking about the sector. Some companies were not listed like TCS and all but it was 1%. Even if TCS were listed would have become 1.1% that’s about it. Guess how much it is today. It is 24%. 14%, 15-16% of the market cap is all IT. So, I think Indian IT potential is underrated. The value migration potential and now with the physical to digital, it the mother of all the value migration. Earlier, it was Boston to Bengaluru now it is the world to Bengaluru. Even Indians want to do it, forget about anybody else. So, I think it’s going to be crazy and we’ll see it in the recruitments. The campus offers you will see as things pick up from here and it will be from work from home from anywhere. If you are in Microsoft in Los Angeles or wherever, why do you have to recruit a guy who is working from home in LA and pay $100,000? For $3,000 give somebody a house in India too and it will cost around $5,000. The guy, rather than working for eight hours, he’ll work for 18 hours. That’s what I’m saying, in a post-Covid world, the world is dominated by services. We don’t realise, we talk about manufacturing, but I think world services’ composition in GDP is more like 68-70%.Manufacturing is much smaller; agriculture is like in a single digit. So, I think on the services side, there will be a huge impact. So, that can surprise you. Private sector insurance can surprise you, they have cut their truth. I think everything is yet to happen, it is a very conservative sector because entry barriers are very high. More than money you need brand equity. But they’re underwriting 30-40 years in the future. So, migrating from the LICs of the world is also going to be tough because there is a sovereign guarantee of underwriting. I think those are sectors where there are going to be huge value-additions and very low capital employed.

You said that you’ve gotten eight books, you’re confused what to read but the great mistakes was one that he thought was really cool. Either one of the best excerpts from any of the books or a book recommendation and why do you think that book should be read by people?

When I open ‘Common Stocks, Uncommon Profits’ for some other reference, because I don’t allow my books to go out of my library. So, 99%books are still there with my marks. So, I opened that and I realised that I think the best book to read is ‘Common Stock, Uncommon Profits’ by Philip Fisher. It is a1958 book and I’m telling you the guy should not skip it. Go through it from page to page, whatever 220-30 pages. It is very refreshing. It looks as if what that old man has said is more relevant than ever before. For investing wisdom, you’ll not get any ideas. You’ll get investing wisdoms which is going to last you—it’s like fishing. I think you need to read not once, you need to read it at least two to three times.

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