This Podcast Can Make You Rich INSTANTLY | Ft SAMCO Founder Jimeet Modi | FO 98 | Raj Shamani

So you were talking about Vijay Mallya. He had a crown jewel, United Spirits. Kingfisher's problems started to come up. Then I realized that Kingfisher was going to shut down. and Vijay Mallya was going to have no choice but to sell it. That is the time when I said, okay, there is an opportunity. I had no doubt that I would make money. But I had no fear. My father used to tell me that if you want to be successful in. the stock market, you have to pay the university fees by making a loss in the stock market.

Beginners are easily fooled by the people in the stock market. See, every person should know three numbers. for success in trading and investing. What are those numbers? So you think there is a recession? People are committing suicide, dead bodies are falling, etc. So should you invest in the ground or in the stock market? I am a stock market guy. But... Before starting today's episode, I have a request. If you have not subscribed to our channel yet,

please subscribe. Because we have seen that 86% people come to our channel but. do not subscribe. If you subscribe, we will be able to bring more better guests. Because the bigger our channel is, the more guests will come. And we will be able to ask them the same hard questions. and understand how to become a better leader. Today's episode is with Jameet Modi. He is the founder of a huge mutual fund, Samco. We tried to understand how to earn money in the stock market. How are scams in the stock market?

How to avoid scams in the stock market? Why is it important for you, me and everyone to understand the stock market? Should we invest in the ground, flats or in the stock market? Should everyone understand the stock market or not? And how does the overall money system of India and the world work? We tried to understand the entire money system in a small episode. Today's episode is very important and very basic.

We have talked about the big businessmen who steal money from India. and run away. Why does this happen? And how to stop them? And what can you and I do so that we never get caught in a scam? Enjoy today's show because it is a very important episode. And if you think that this episode is too long, then you can go and subscribe to our Rajshamani Clips and Rajshamani Shorts channel. Because in a very short time, in a very short clip, in a very short shot,

we try to make you a better leader by bringing the best value for you. Enjoy today's show. First, you tell me how did you earn money? What strategy did you use to earn? Give me your story, give me your flavor. And then we go down to it. This route of making money by depth was an accidental discovery. So the first trade in my life where I earned a lot of money.

was a company called United Spirits. In 2011-12, around that time, Vijay Mallya was going through a terrible time with Kingfisher. And he had a crown jewel, United Spirits. And when I was working on doing depth on trying to figure out. what's the value of United Spirits, the whole company was getting in 1 billion dollars.

That company had 50% market share of the Indian liquor market. That means, in every 2 bottles of alcohol, one bottle of money used to go to United Spirits McDowell. If this was a foreign company or not a Vijay Mallya company, there was no way it would be selling so cheap. And when Kingfisher's problem started coming, then I realized that Kingfisher is going to shut down.

and Vijay Mallya is going to have no choice but to sell it. That is the time when I said, okay, there is an opportunity. It is a mispriced asset. 50% of the industry market share is available in 1 billion. There is no way this will be trading at less than 3-4 billion. And actually that is what happened. Because of Kingfisher's trouble, Vijay Mallya had to go and find a buyer. They went and found Diageo.

And Diageo actually, they ended up buying it at about 2.5-3 billion. And that journey of entering when the market cap was a billion, selling at 3 billion, and having that conviction that I will have to sell it. And when I sell it, it will get the right price. The asset will be at the right price. So, it will become a lot of money. That conviction and through that journey. helped me make big money in my first large trade. So, you will think that this was a one-off.

How will I make money again and again? But trust me, every time and then, every year or two years, you will get such opportunities. The key is, as I said, you will have to identify that insight, generate that insight based on a pattern. And when you get that pattern, you will have to put in money with conviction. People get scared there. Yes, people get scared there. What will happen if it goes wrong? It's not good.

So, what happened with Vijay Mallya in Kingfisher? What exactly was the process? Because it is still unclear. Right? He is out of the country. He is in the UK. And he claims that his matter is not a financial matter. It is a political matter. People want to put me in jail because of political reasons. I am ready to pay money. And what is that matter? Do you know anything about it? So, I think as far as the whatever publicly.

available information is there, the claim is that Kingfisher owes money to the banks. Kingfisher Airlines, whatever they have done, the bank liabilities and those liabilities have to be paid. Those liabilities have principles and interests. And I think the government is making certain claims. and they have decided that there will be some embezzlement or laundering.

I don't know what exactly is. So, how much is the total amount? I think about 7-8 thousand crores. Okay. Is what? Publicly available. Publicly. And in the interest, it is like you keep adding interest. The interest is such a thing that it keeps going. So, I think Vijay Mallya's point of view is that I am willing to settle that. by giving the principle. Maybe the banks don't want to agree but it is a matter of negotiation. He is saying that if I take 8000 crores out of it,

I had taken 4000 crores, the rest 4 are interest. I am ready to give 4. Now the banks will have to agree that why should we do interest loss. They will say that you, I mean, as I said, that's a matter of negotiation. Okay. Tell me more about, I have 2-3 people who I feel they are very famous. Let's talk a little about them and then we will go to other topics. Right. One is Warren Buffet, what is his strategy, how did he earn money, what is special about him that he earned so much money and he is considered.

that Warren Buffet and Charlie Munger are the same. I mean, they have created the finance world. They are the biggest. I think the biggest thing that has worked in for Warren Buffet. is just what we spoke before. He has consistently been at it for 60 plus years. From 1950s, 1954-1950s, he has been, you know, he started with the Buffet partnership.

You will be surprised that 99% of his wealth got created after he turned 65. I mean, he started so early. In 11 years. Yes, he started in 11 years, but he was not so successful for 11 years. After 1950s, things started really taking off for him. But 60-70 years in the market, if you give yourself that much time, I am saying even today, anybody who is starting at 2025,

and if he takes care of himself and can live for 80-90 years, and he can see the compounding of 70-80 years, then that's an insane amount of money to be made. I think time is one thing, so they have been phenomenally patient. I think, outstanding investment in terms of patience, rarely you will find anyone like that. Everybody wants to be rich tomorrow, but I think, they have said, okay, we will, you know, there is a lot of time.

where Warren Buffet actually said, I have no doubt that I will make money, but I had no fear. You know, if I am a billionaire, a multi-billionaire, then I will definitely become one. But I am living in my time, so I will have patience. And his strategy was very clear, right? Buying great businesses at fair prices, that's it. It's a very simple thing. You go out and buy products or businesses which make products. or sell services that you use daily, that's it.

And you buy them at a time where no one is looking at it. It's too early. No, not early. You don't even need to be early. You will be surprised, his largest trade, you know, he has made a hundred billion dollar in Apple. I think they started buying Apple in 2011, 12, 13. So it was not early. Apple was incorporated in 1980s. It took 30 years. But they bought such a large position and they held it. Or they actually bought Apple at a time when nobody was looking.

Apple was trading at Apple. Steve Jobs. Yeah. It was a PE of 12-13, 13-14 at it. And he said, okay, this is a product that people can't live without. People used to think it's just a hardware business. And he went on and bought a fairly large stick. Today, it's a 100 billion dollar gain for him. So, a simple strategy, but as I said, you have to give it that time. You have to give it those 50, 60, 70 years. And as I said, 99% of his wealth got created after he turned 65.

Also, do you think that this thing worked in his favor? The American story. Absolutely. The time America was booming, the time America consumes, he kept buying all those things. Like Coca-Cola, I think Taco Bell. No, what's the name? American Express. American Express, Coca-Cola. What's the biggest ice cream which he bought? He bought cheese candy. Yeah, candies he bought. Like there are a lot of big companies in which he earned maximum money. Apple, then we talk about.

So, when all these things were being made in America, the American story was being made, when the American dream was being fulfilled, then he bought all the things that America consumes at large. And that was also a favorite point for him, because of which he earned a lot of money. And do you think that is happening in India now? Because now the Indian dream, the Indian story is going to be made. So, in India, now the one who will hold for the next 20 years, 25 years, using today's companies, do you think there is an opportunity? 100%.

I think, you know, Warren Buffett often says that he was successful, not only because of the things that he did, but because he was in America at the right place at the right time. And today, for our generation, for us Indians, I think India is in 2023 and in this decade, what probably America was in the 1950s and 60s. So, this is the golden era for us.

I mean, the next 25 years, which is called the nectar time. This is actually a nectar time for us. But to drink nectar in nectar time, as I said, you have to be invested. If you are invested, then nectar will be digested. Otherwise, you will have water digest. So, how is money made? I think in India, if you want to make money in stock market, then there are only two ways. So, I think that the two ways,

one, either you can make money by going deep into something, or you can make money by investing in a systematic way, by breath. So, now I will explain the example, what is the meaning of depth and what is the meaning of breath. Depth means that you are an expert on a topic or a subject. For example, you are a steel trader. So, you understand the steel industry.

You understand the cycle of the steel industry. You are in the tyre industry. You are an IT services professional. So, you are working in an IT company. So, you have expertise in a specific sector or a specific type of business. And you have certain insights that the outside sector does not have. For example, IT people know when the project is increasing, when it is going, when the demand is increasing, when the demand is going. In the same steel, you are in every sector.

Now you have a differentiated insight of a specific aspect. And you use that differentiated insight to make money. That you entered at the right time, you held at the right time, you played the cycle. So, you can make a lot of money. So, having a differentiated insight which allows you to go into depths. that others cannot go, that is one serious edge in which people can make money.

And I have seen many people who have such an edge, they work in the same circle of competence. That is, if someone says that I am a steel trader, I understand the cycle of steel, when the price of steel is going up. So, I have seen that they only take Tata Steel, JSW Steel, these types of shares. In that cycle, they go up, enter and make money. And when the cycle turns, they leave. So, this is one way to make money. The second way, which is the way of breadth,

that is, you do not have any specific sector or industry insight, but you have made a system. You have found some type of strategy, which you can use on any stock, typically you have done a pattern recognition, ultimately making money in the stock market is the work of pattern recognition. You found a pattern and you run that pattern repeatedly on any stock. So, you get a mathematical advantage in that.

If you get that mathematical advantage, then you can make money. But it will be almost the same in all the sectors. Because at the end of the day, see what is the stock market? It is the collective wisdom of humans. Okay, explain more deep. What is the market? You, like me, thousands and lakhs of participants, ultimately trading in the market, investing.

What is the price that reflects? What is that? Ultimately, it is the collective wisdom of all of us, which is reflected in it. So, the price always reflects human behavior at the end of the day. And humans by nature, they are repetitive and they generally leave patterns. It is a simple calculation. If we say there is a fire, then everyone is a human,

so let's run. So, humans behave in a very certain set pattern manner. If you are able to identify that pattern, and if you are able to make a mathematical edge out of that pattern. and make money, then nothing can stop you from making money. Fair. And what is your take on side income, passive income? What's the take on it? Because a lot of people treat the stock market. as passive income, as side income. And thousands of influencers, finfluencers,

content creators, gurus, all tell you to make passive income. Become rich overnight, you will sleep and you will have 2 lakh rupees in the bank. So, is that possible? Is it possible to make passive income? It is possible. It is not that possible. But actually, as you said, passive income, second income, is such a misused term.

It is misused in the left-right center. So, I think passive income, there are two ways to make money in the stock market. If you are doing it yourself, that is, you have opened your own trading account, you are trading yourself, you are investing yourself, even if you are investing in mutual funds, you are doing everything yourself,

then this is as good as your business. Okay. Then you can't do it passively. Then you are an active participant in the market. and you have to do things actively. It happened that I opened a shop, so I have to go to the shop. The customer will not come on his own, the goods will not be sold on their own, the accounting will not be done on their own. So, if you are doing it yourself, then you are an active participant,

then there is no such thing as passive income. And if you are an active participant. and you treat it as passive, that I will open my shop without doing anything, I will open my trading account and. I will keep getting 2 lakhs in my account, 100% money will keep going, it will not come. You have to earn genuinely passive income. And you can't do it yourself. You don't have time, you don't have understanding. So you can do one thing, you can also give it to a professional.

You either give money to a mutual fund manager, or you appoint an advisor or a distributor. and tell him that I make XYZ money every month, I get so much bonus from time to time, and I have to convert this money into wealth, I have to make some more money, so he will make a plan for you. But that is genuine passive income. But when you accept passive income,

then you will have to keep realistic expectations. from passive income. FD's money is passive income, it makes 8%. You will take a little more risk, invest in a mutual fund, give it to an advisor, etc. Instead of 8, it will become 12, 13, 14. But don't expect that you will be able to earn 20%, 25%, 30%, unless you do it yourself and then treat it like a business. What are the other ways in which people. earn money in the stock market by doing it?

If you don't have a depth method, and if you don't have that much bandwidth, then as I told you, the breadth method. The breadth method is the method of making big money. So, who has actually earned a lot of money. in trading and investing, they made money on the basis of the system. And when I say system, see, every person. Three numbers should be known for success in trading and investing.

Okay. What are the numbers? So first I ask you whether you know those numbers or not. No, no. I don't know. Tell me first. I don't do it. I don't know trading. Even investing. So the first number is what is your strike rate? That is, when you make money, how much money do you make? Okay. So let's say if you make a hundred investments.

This is a misunderstanding for a retail investor that I will. be right 100 out of 100 times. You know. Trust me, the biggest systems, the biggest traders in the world, if you have a strike rate of 50 or 60%, then you are outstanding. You know, Rakesh Jhunjhunwala ji used to say that my strike rate. was only 35-40%. So the first number is the strike rate.

The second number is the average winner. That is, if I trade 100 times and I get right 50-55 times, then when I get right 50-55 times, how good am I? If I am right every time and I am making 5 rupees, then okay, that is how I will, that's the number it is. The third number is when you are wrong, how wrong are you?

So actually trading and investing is like a coin toss. If I tell you to keep doing coin toss, what is your strike rate? It will be 50%. You will hit 50%, you will be right 50% of the times. But let me say, every time you win, you will get 2 rupees. But every time you lose, I will take only 1. Then how many times will you coin the cost? Infinite times.

Infinite, yeah, because I know that I am winning. So this system, so what does a retail trader, retail investor do? He thinks that I will be right 100% of the times. But you know, there is a gentleman called Mr. Jim Simmons. He is the most astute, known to be the most astute trader in the world, Yes. You know, their strike rate, they probably compounded at 66% per annum. For years. For 20, 30, 40 years.

His strike rate was only 50.75%. Then they used to say that we are right 50.75% of the times. But when we are right, we are right 100% of the times. So if you pay attention to these three numbers and you can master these three numbers. In reality, if I tell you, your viewers will go to their own account. and see what was my strike rate. So first no one knows. Then you will ask someone what was your average gainer and what.

was your average loser. People have the opposite. I have seen people many times. that when I earn money, I earn only one rupee. And when the money goes, three or four go away. So why are you doing this? So this is the formula for disaster. Absolutely. So these people don't understand. And when I say a breadth, you have to build a system.

where these numbers are in your favor. You have to find a way where even if you are right 50-60% of the time. You have taken a breakout strategy or any type of strategy, you will get thousands of strategies. But in that strategy, your three-digit model, this model should. help you build a positive expectancy model. And then if you crack that, then you can actually make big money. Then you are 20%, 25%. But then it becomes like a business.

You know, and like you take a retail business. What do people do in retail business today? Not all stock gets sold at MRP, right? Of course. You know, something is at 100 rupees MRP, I have bought it for 25 rupees. My 50% or 60% goods will go to MRP. But I have to sell 40-50% goods by discounting 20-30%. And I will make money from that mathematics too. This type of mathematics also works in trading and investing business.

And if you understand this mathematics and you crack this mathematics. Then you will be very successful. So, tell me one thing. Should every person invest in stock market or not? So, 100% people should invest. How to invest is debatable. Okay, how to invest? There are two ways. Either you do it yourself.

But if, like I told you, you have a system or you have a breadth inside. Then you do it yourself and make money from yourself. But if it is not there, then you... Like we talked about putting money in index fund. Or give money to some fund manager. Or appoint some advisor or PMS. So, either you do it for yourself or you let a professional handle. it for you. But you have to be in the stock market. See, India is one of the biggest stories for the next two decades.

I mean, we have... Raj, there is a generational opportunity to make an insane amount of money. You know, and trust me. In the next two decades, the amount of money that we have made in the last three to four decades, more money will be made in absolute terms in the next two decades. But if you want to capture that upside, it will be only with equity. Okay. If you look at global references, right? You know, when the Japanese economy was two and a half trillion,

it went from two and a half to five trillion. The stock market went up ten times. If you look at Chinese economy, same. You know, today we are also in the range of two and a half trillion dollars. Three and a half trillion. So, the journey of three trillion dollars will be five trillion. I think the amount of money, the globally stock markets in the world, wherever economies have grown, I mean, there are a few cases, the US, Japan, China, etc. The maximum money in the stock market has been made.

while this journey was being carried on by the economy. So, you have to play this. In equity and the stock market, you have to put money. How do you put it? As I said, it's up to you. Insight which I got it from one of the biggest trading houses. in the country, that 90-95% of the traders do not make money in the stock market, They only make losses. 5%-10% are some people, in fact, there are fewer,

who are able to beat the actual index and make money. Otherwise, 90-95% people are not able to beat the index. So, why do it yourself when you know that there are no maximum chances? So, that's why actually you are bang on. Very recently, we launched a mission called Mission is the Index. From this point of view, 80-90% people. who are making 10-11% of the index, they are not able to make it.

So, the fund of Mission is the Index is that you take a pledge. that either I will earn more than 10-11% if I do it myself, and if I don't make 10-11%, then I will stop trading. and either I will give money to a professional fund manager. or I will invest in an index fund. So, you take this pledge for yourself that I will do one out of three. I will either raise the index or I will give money to a fund manager. or I will index by putting money in an ETF or an index fund.

So, reality is that, Now, when it comes to starting, how do you start? See, you can start by looking at an online course. You can start by. reading books, etc. You can. But this is like cooking. Okay. You watch as many videos of cooking. Okay. Till the time you actually go to the kitchen. and you. pick up. all the ingredients and start cooking yourself, you are not going to become a good cook.

So, in this. industry and in this business, you will become a good cook. only if you actually do it. And. as I told you, you don't have to make sure that your first. dish is like Sanjeev Gopur, No. You know, you can. you can have a. you can be bad at your first time also. And, it's. good if you are bad at the first few times. because beginners luck is on people's head in the stock market.

So, if you. so, my. my father actually used to tell me that. if you want to be successful in the stock market, then you have to. pay the university fees by losing the stock market. I have actually lost many lakhs from myself. And that has been my fees to education. The school of the stock market. That is my. because otherwise there is no such institute where you can go. and get a degree. So, the money you lose,

that is your degree. And until you do that, it won't happen. So, you. start from anywhere. You watch a video of a finfluencer. You do a trading course. You go to an institute. You start from anywhere. But as I said, ultimately, you will have to pay the fees to the market. And when you pay the fees and what you will get to learn, that will transform your. trading and your investing and that will help you become far more successful.

Far, far more successful. Okay. So, people like me, I am doing other things in my life. So, I am very busy. But I am earning a little bit from them. Now I have to take that and invest. Okay. So, I look for a fund manager. So, how do I know which fund manager is right? What are the ways? Because I will give you an example. I invested in a fund two years ago.

I found a PMS and invested a lot of money in it. And the amount of money I invested, I... They have a very big name. They have a lot of names. People know them. Their videos, their books are everywhere. People believe in them everywhere. And i lost 23 %. My absolute negative was minus 23%. In a PMS, which. is invested in all blue chip companies, in that PMS, the index was almost like that. I invested minus 23% in that.

After getting all the good reviews, because I got all the good reviews about it. Their ideologies were good. Their conviction was very strong. After all that, I got minus 23%. So, how will it happen? It's fine. That, the minus 23% I got here, in the other place, where I invested money, it increased. So, I didn't care so much. But if I had invested all the money here, which I was going to invest, then it would have been an absolute loss for me. Even after getting all the good reviews, if I lose money every 2-3 years, what does it mean?

So, how do I choose which is the right person? So, I think , first of all, your. time horizon is wrong. If you are taking equity exposure, and you see it only in 2 years, or review it in 1.5-2-3 years, then it's wrong. Because in the equity market, my view is very clear. If you can't take a 5-year view, then you shouldn't come here.

First of all. So, you have to be patient. from a 4-5 year point of view. So, there is a global math and global stat that says that. if you take a 1-year view in equity, you will be right only. 60% of the times. 40% of the time, your money will be lost, Okay. But if you take a 5, 10, 20-year view, then the strike rate is 100%. So, if you... Whatever money you have given to the PMS manager, if you stick with the method. for a 5-8-10 year period,

you will make money. You don't have to be worried about it. And this up and down will keep happening. This will be a 100-20. In fact, I have seen so many times in... In fact, some of the best mutual funds that are. available in India, I will not name them, but there have been funds. which were 10 rupees, whose NAV (Net Asset Value), which were 5.5 rupees, and today, it has become 50, 80, 100 rupees. But if you have not gone through that journey of 10 to 5.5, then you will not be able to enjoy the journey of 10 to 30, 40.

Now, having said that, still how do you choose a good. fund manager or how do you choose a good advisor. or a good distributor? I think. the first aspect is always going to be. if whether he understands the cycles or not. And what is the time horizon. that he is asking you for money. I mean, it is a big red flag if somebody is asking you.

to put money in equity just for a year or two years. So, that is a big red flag. If you get such a person, that if you take money in a year, it will become 30-40%. So, run away from it. You know, so I think that is one red flag. Second is, is there a. clear methodology involved? I mean, see, nobody is going to reveal. their entire formula for success. But is there a well-documented process?

Is there a well, which understands and accepts that, yeah, across cycles, we are going to do this. At the end of it, we are going to make money. And that is a very important. part of the process. And third is genuinely somebody who is, I think, in a good fund manager, in a good, is. finding somebody who is genuinely interested in making money. for the client, who has a client-first approach. And not doing it for himself. That is also very important to find.

Because I think there are lots of fund managers, there are great fund managers in this country, who are doing fund management who, to earn money, they have, you know, you know, hundreds of crores themselves. They are actually doing this for the love of. money management and actually to genuinely create wealth for investors. So I think. that is one judgment that. as an investor, you will have to take whether he is genuinely in it for. making money for investors or not.

And then final thing is skin in the game. How much money they have invested. I think there is no better indicator than that. You know, if. the fund manager you have given money to, if his majority wealth is in that fund, then you are in the right together. Then, you know, nothing beats skin in the game. Sir, if we talk about India, the Warren Buffet of India, who was considered. late, Rakesh Jhunjhunwala ji, if we talk about him, what was his specialty?

Why do you think that he made so much money? And he earned money in the market in a very strong way. He was called a big bull. So how did he earn money? There are lots of other people who made money. in that period and they made a lot of money. But Rakesh ji's. specialty or what brought him to light was his. undisputed love for India. And he was like an eternal bull on India.

Today, I think the biggest achievement for Rakesh ji probably. would not be that. he is a multi-billionaire, but I think he is a Padma Shri. For an Indian. individual from the stock market. to be a Padma Shri, he... you know, never has he said one bad thing about India. He has always been such a big believer in India. And this was his specialty.

as compared to others because. you know, I think other people, other investors, other traders, at some or the other point of time, they. might have some pessimism for India. They might think that. you know, there is no government stability, we are still a backward nation, there is no infrastructure, etc. But Rakesh ji had. raw bullishness. You know, and I think that raw bullishness and that. optimism for India. worked in his favor as compared to anybody else.

Because everyone. at some or the other point of time. would have been negative. That, you know, this election lost, that election won, there is no government stability, the infrastructure is not good, there is a recession, etc. So, but through, and I am sure, I mean since 1985, he saw the Harshad Mehta, Ketan Parekh, Rajaram, this... Global financial crisis. But. every time, I mean, I think that is a case study for.

every retail investor and trader. You go and see their interviews every time. He has been. always bullish about India. Especially in the stock market. This is a very interesting thing that I will tell you. Being negative, being pessimistic. is seen as a sign of expertise. You know, people feel that you. say something negative, say some caution, be conservative, be a little bearish,

and you say to people that, you know, you become... you will say that a big crash is about to come. there is going to be a US recession. It's very fashionable. It's very very fashionable and it makes you sound like an expert. You know, and that gives you a perception of an expert. But I think as I said, irrespective of any time frame that you look at, any time in market that you listen to Rakeshji's interview, he has always been bullish. So what do you think, we are talking so much about bullish and bearish.

and a lot of people are saying that. a global recession is going to come. Everyone is talking about it. The US, the Fed, has printed a lot of money in the last 2-3 years. And they were technically distributing the money for free. The Fed rates were very low, the interest rate was very low, now it has increased. Right? So now a recession is going to come in the whole world. because until now everyone has enjoyed the money, now it is not that much. Right? Like we are talking about optimism,

talking about opportunities, talking about jobs, everything is overpriced. People bought it at an overpriced price, it suddenly boomed. Now it is going to fall down. So do you think a recession is coming? See, I mean, I don't know if a recession is going to come or not. You know, I think even the US central government or the governor, I mean, Mr. Powell also doesn't know whether there is going to be a recession or not. So I am no expert to comment on whether there is going to be a. recession or not. US recession or not. But I think being a participant of the stock market,

I have mentally accepted the fact. that every 10 years, once the market falls by 50%, every 2-3 years, once the market falls by 20-25%, and every year you will see a 5-10% drawdown. I have mentally accepted this and this is a part of my game. And this makes my life very easy.

Whether a recession will come or not, I know for a fact that. I will see a 40-50% downfall every decade. I have to bear that. And if you see history, you know, humans have a fantastic tendency. Whenever our backs are against the wall, we bounce back very well. Same way, if a US recession comes, there will be enough and more that will be done by governments. in the US as well as globally.

to make sure that the bounce back is. as fast or as efficient as possible. So, stay in that fear that a recession will come, I will not buy the stock now, I will not invest the money now, and I will see later. If you stay in that fear, then you will be left behind. But people don't say that hold on to it at this time. Don't invest in the market. Because it is going to come. And because of that, you hold on to it for a while, wait for a year or two, then invest. Collect it now.

Cash is king in this market. People say that collect it, if you keep cash with you, you will be king in the market. Don't invest in equity, you will go down. So, what do you think about this? So, cash is king. I agree. Only if. you have the heart of a king, that when the recession or the fall actually happens, you deploy the cash.

What happens often? Let's assume. Let us assume that we had foresight and. we say that there was a recession in March 2024, markets have fallen 30% and you've been waiting on cash. for that moment. How many people have the heart. to deploy money in March? That is the big question. When you panic.

and when the market falls by 20-30%, then it becomes such an environment that you will feel that it will fall by 50%. It will fall more. Then when it falls by 50%, then you feel that. people scare you so much that you will think that. it will fall by 70%. You will think that people are committing suicide, dead bodies are falling, etc. Then you should have the heart, but I don't think so. That I will go out and deploy the cash. that I have been building.

In my view, not more than. 1 or 2% of the people. have that kind of heart. I mean, you can earn all year round. I tell you that when the recession comes, you will be holding. cash in your hand. It is very hard to pull the trigger, True. That is why they say. while cash is king, and I firmly believe, if you have that mental capability,

no matter how much you panic, if my threshold meets, then I will invest money. Then I will not worry that it will fall by 10% or 20%. I will not try and find the bottom. I mean, even Mr. Buffett does that. But Mr. Buffett's. advantage is that. when the market falls, he has a heart. There have been months when he has invested 50 billion dollars. How many people have that heart?

I tell you that 1.5 crore has been deposited in your bank balance. Now the market has fallen, invest 1.5 crore. It does not work. People cannot do it. That is why people say that you should be an investor. Keep a little cash. Play a little. But 80-85-90%. you should be an investor. For this, many advisors will also tell you that. you will not be able to time it, you should do an STP. You have 1 crore, you invest 1 crore. Or do some type of. timing STP so that.

at least you are. investing in the markets with discipline. You are not waiting and then. otherwise you will. sit on cash. Nice. But one interesting. recently I was reading a research. Tell me how true or. false it is, right? Whenever the US market goes down in the recession, then the South East market, India market increases. Have you ever seen that after every US recession, the boom starts in the India market? So,

there have been enough and more, there is enough and more evidence to show that. bull markets in India. have preceded. US recessions. So, you know, in 2001-02, when 9-11 happened in the US, there was a tough time. After that, India had a fantastic bull run. Even look at the global financial crisis. There was a US recession and then India had a. great rally from them. Same tapered trend term in 2005. So, there is enough and more evidence that.

typically, once, after a US recession, there is a massive. bull run that follows. So, whether it will happen next time or not, we don't know. And as I said, I mean, we should not be predicting. whether this will happen or not. But, generally, structurally, things are, that's the only thing that you can play. Structurally, is the India story working in your favor or not? And that undoubtedly is. I am not from Bombay, I am from Indore. So, if I had invested in Indore,

on some land, 10 years ago, and in some stock, which was very high, I don't know, in TCS, right? So, I would have more profit in land, comparatively to TCS. Even though, TCS, in last 10 years, grew really well. So, there is always a debate. And a lot of tier-2, tier-3 cities say that, no, man, invest in land, money will be made in land, because here, construction is happening, growth is happening. So, should I invest in land or in stock market?

So, I am a stock market guy. I will always obviously say that, you should have exposure to the stock markets. But, there are two practical reasons, whereby I believe, that stock markets are a superior. investment alternative to real estate. Okay. The first reason is that, there is an entry barrier of size in land.

You will not get land worth 5000. But, if you want to invest in stock market, then you can start an SIP of 500 rupees. So, real estate actually, and in fact, in the last few years, where real estate prices have increased, in today's date, if a normal person does not have 1.5 crore, 2 crore rupees, then you cannot invest in decent size real estate. So, size is a very big factor.

you will say that, if you had bought land in Indore, and bought shares of TCS, 10 years ago, TCS share was 300 rupees. So, if you had invested 300 rupees, then you would have got 3300 rupees, and you would have got a dividend of 700-1000 rupees. But, you cannot buy land in 300 rupees. You may not be able to buy land in 3 lakhs. But, if you have invested 3 lakhs in TCS, then you would have got 30 lakhs. So, I think that is one. major, major advantage. in the stock markets,

which is not there in real estate. I think the second big advantage in the stock market, which is not there in real estate, is called reinvestment. See, the beauty about stock markets, is that, you are investing in a company, and that company makes money. The money that the company makes, that company automatically reinvest the money. in other businesses or in growth,

which will increase your value of money. So take for example Reliance. Reliance started making money from the oil and gas business. They made money from the oil and gas business. They gave a little. dividend but retained the majority of the money. Then they made Jio from that. Then they made Reliance retail. from that. So effectively the overall value of the business. can keep growing. And this will happen even if you are a single shareholder. This will happen for you. Real estate will not be like that. You will not get any cash.

flow from the land, nor will it be reinvested. True. And if it is reinvested, then if you have taken a property. worth 1 crore and you get 2-3 lakhs rent per year, then where will you reinvest 3 lakhs of rent again? You will not get a property worth 3 lakhs again. So 3 lakhs will not be your compounding. So let's say you get rent in 5 years, 15 lakhs, 16 lakhs rent. But what about that money? So your value will only go up of that.

1 crore. Compounding will never happen in real estate. But the power of compounding will play out in stock markets. And I think the third biggest advantage in my mind is liquidity. That is the factor. You know, you can invest in Indore anytime. As long as you don't get a good property for your property, you will be stuck. Whereas in the stock market, this money may be less, but if you.

need it, you will get it back the next day. And what is the use of money if you can't use it when you want it? You know, if you need money for an emergency, why don't you have. a land worth crores? If you don't get actual liquidity when you. need it, then it's of no use. Interesting. Thank you so much, Jameed Bhai. I hope that we covered. a lot of things and I hope you enjoyed overall.

How was your experience? I enjoyed. I mean, I had a great time. Perfect. Yeah. I liked it. I was glad that we did it. I got to learn a lot of interesting things. I got to learn a. lot of interesting takes. I really liked the take that you said after Warren Buffett. About. the American story. Then you said about Indian Story, a very good thing that you should have a passion. if you are holding cash. Then the 50% one that I know I have to go 50% every 10 years. So I loved these insights. They just help me as an individual.

to think about mental models in a certain way. So thank you so much for sharing. Thank you so much. It is my pleasure. I had a great time doing this. Thank you, sir. Thank you so much for watching this episode till the end. Please tell us in the comments which topics you want to know about. What are your problems and which guests do you think can solve those problems? Is it about business? Is it about wealth? Is it about health? Is it about country and India? Or is it about relationships?

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