Peter Smith
There are plenty of success stories you can find over the Internet. They are usually telling you about traders who came out of nothing and made huge amounts of money over a decade or so. However, the story of Ramesh Damani is not another tale about a man who had only a few rupees in his pocket and managed to make millions by chance.
The future successful investor was born into a family of investors who spent their lives buying and selling stocks. The son even managed to surpass his father while his start couldn’t be considered successful, and his career was under question for some time.
Ramesh Damani is one of the stars that inspires a lot of investors from India nowadays. His investment path was far from being easy, and at some points, he could even give up and stay a coder, but he was a pretty stubborn man who decided to develop his skills and finally managed to make his wealth by buying and selling stocks.
From ‘never’ to ‘I will try’: how the story of success began
Ramesh Damani was not one of those natural-born investors who wanted to start buying and selling stocks once they reached the legal age. Ramesh wanted to become a coder and even worked for a few years in the United States as a software developer.
Ramesh's father sent his only son to the USA so junior Damani could continue his studies there. However, the son had no intention of learning more about stock markets, while the father wanted him to invest in stocks, and he was seeking to persuade his son to start buying stocks and change his mind about a career in the investment niche.
To make it more attractive for his son to start investing in stocks, senior Damani decided to pull a trick. He sent 10,000 USD to Ramesh and told him that he could use this money to buy stocks but only with some conditions: there would be no punishment if Ramesh lost the amount, but if he managed to make some profits, he could leave them all.
This was the first time the future successful investor bought some stocks on the US market. This was not a successful experience, as Ramesh failed to profit. However, this negative experience inspired Junior Damani to try again. And that time, the attempt was much better and defined his future.
Damani’s first steps as a professional broker and investor
The first big profit came to Damani in 1993, when Infosys went public. Ramesh was a coder in the United States during this period, and he knew a lot about this project and its background. Therefore, he was sure that the company had potential and bought stocks. Six years later, the investment brought him solid profits.
Another successful investment was made in 2002–2003 when Ramesh was bullish on the liquor business. Damani invested in the local stock market and made solid investment returns this time.
Ramesh Damani continues his investment career, which can be considered successful as his business helped him make colossal capital. With its ups and downs, this story has many things to teach traders who only begin the investment path now.
What could traders and investors learn from Ramesh Damani's experience?
First and foremost, the first negative experience that Damani had with his father’s 10,000 USD was due to the fact that he bought stocks that plunged after the bull run. That was a big mistake as there is no guarantee that the fallen stocks will rise again in the future.
Another big mistake Damani made was not buying aggressively during the recession of 2008. He was too late to start buying stock then, as markets had already begun to recover when he placed his first orders.
Damani became a successful investor thanks to his attitude and ability to learn from his mistakes. He admits his losses but treats them as lessons instead of being sorry about the money lost. Below you can find the main principles that Damani uses in his business strategy now:
- Buy only businesses with some margin of safety;
- Try to buy stocks at the early stage of growth;
- Before buying a stock, try to understand the value of compounding.
What rules should you bring into your trading practice?
Be resolute about your decision to become a trader
Those new to trading and investments should keep in mind that bad things may happen. Ramesh lost all his first investments by making the wrong market decisions. Most traders and investors stop at this point, thinking they will never succeed. Ramesh did the right thing and decided to re-evaluate the strategy that brought him significant dividends in the future.
Analyse and learn from your past mistakes
Ramesh made a lot of effort to analyze his mistakes and made conclusions based on what he did wrong in the past. This helped him find a way to better allocate his investments in the future.
Keep pushing and gaining knowledge
Ramesh Damani's Net worth is more than 100 Cr., which is very impressive, but to gain such wealth, the famous investor had to do a lot and never stopped learning from the market.
Peter Smith
