Co-founder of Motilal Oswal Financial Services and value investor Raamdeo Agrawal’s annual Wealth Creation Study on finding 100X opportunities in 2014 was well received but it had a drawback. To improvise on that, the 2015 Wealth Creation Study was themed “Mid-to-Mega” which he considers far more robust and practical.
What led you to further dwell on the findings of the 100X study?
During the 100X Wealth Creation Study we learnt a lot of things. When we studied the 47 companies which went up at least 100x over 20 years, we learnt how companies grow from small to big and mini to mega. But later on we realised 100X is a rare phenomenon. Getting right some of the stocks like Infosys, HDFC, Lupin, which gave 100X return, happens rarely and that one should have the wisdom to buy at the right time and hold them. What i mean to say is that the probability is very low, like winning a lottery. You cannot consciously build a portfolio of 100X as the probability of finding such stocks frequently is very low.
What is the probability of finding 100X opportunities in the current market?
That is what our 2014 study left untouched. We realised that we still need to work and refine it further. Hen