Raamdeo Agrawal on what to look for if you want maximum excitement in the market

economictimes.indiatimes.com:

Raamdeo Agrawal, Chairman, MOFSL, says “wherever you have about 20%-25% growth, you can make decent money. In fact, you can get market-beating returns there. Then there are stocks where it is not going below mean and 10%-12% PE multiple is there.

Either the companies are not discovered or they are smaller companies. There, one has the opportunity to bring that story into the market and not only get the earnings growth of 25%, but also double the PE multiple. That is where the maximum excitement happens, where stocks are below PE multiple.”When I started my journey as a financial journalist the Sensex was at about 4,500-5,000, Nifty was in three digits and now everybody is talking about one lakh for Sensex coming in four or five years. Your view.I started my career at Sensex at 100.

I bought my first stock in 1980. At that time it was supposed to be 100. Today, it is 65,000.

So I have seen 650 times of the market and it is just going on. There are always ups and downs, massive ups and downs but if you take a five, seven, 10 years view, then there is never a crisis. There is no mandi at all.

There is always 10-12%. In very good times, 10 years will give you 17-18%. In very bad times, like if you start from very high, it will give about 12-13%.

So making 10-12% is easier than what looks to be. One does not have to do too much effort to make about 12% in Indian markets, pre-tax return. You just buy the index and forget it, you will make 12%.If the starting point is today?I do not think you are in for a 17% return.