"The Market is Just a Reference Point for Price"

Raamdeo Agrawal, co-founder of Motilal Oswal Financial Services, on keeping distraction away

Published 4 years ago on Sep 12, 2016 Read
Soumik Kar

Selective reading: I have never had a television in my office. On TV, information is ‘pushed’ to you, whether you need it or not. The internet is a considerably more efficient source and we can ‘pull’ out only the information that we need. Also, I know what to look for and in which newspaper. Some business papers cover things better than the others.

No disturbance please: I don’t encourage people to call during market hours and give me a running commentary. If you want to talk about stocks other than what I hold, I’m not interested. 

Let daily fluctuations be: In my early days, daily market movements did affect me. But after reading a lot on behavioural finance and economics, I am now least impacted by market behaviour. Yes, if the market goes up and my stocks do well, I am happy. But I also know this happiness is of no use unless I sell!

Company matters: What is most vital in the market is what companies do and not what’s up at the exchanges. Rather than hot tips, I am more interested in material news on companies – if a large enterprise is saying its profit will be hurt next year, or if somebody’s pricing power is down – that’s more important to me than the stock price. Another source of noise is rumour on who is buying and selling a stock. I just don’t care about it and I don’t pay any attention to it. 

What I don’t want: I follow the buy-and-hold approach, I don’t trade. For me, the market is just a reference point for price, nothing else. My refusal to trade keeps a lot of noise out and it helps me filter out what I don’t want. As it is now possible to get precise information, it is up to us to take what we want.


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