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ule no 1: never lose money; rule No 2: Dont forget rule No 1. There is no better way to set the tone for this investor-pedia than by recalling this succinct advice from the mightiest investor of them allWarren Buffett. You could respond with: Easier said than done. And he would nod sympathetically. The times, after all, have been turbulent. And wisdom has been pouring in from all quartersevery television set, newspaper, and even your neighbourhood uncle.

Instead, we bring you the voices that actually mattersome of which have shaped investing strategies over the last few decades. The countrys 20 most influential investors comprise Forbes Indias inaugural Wealth Wizards package. They have seen the markets through roller coaster rides and survived to tell the tale. We got them to share their respective investing philosophies; a common theme that emerged was: Invest in equities for the long term and you will eventually make money.

We picked fund managers, individual investors and academicians who are all trailblazers in their own right. Take Chandrakant Sampat: The man who made money by investing in FMCG way back in the 50s. Bharat Shah and Samir Arora garnered huge fan followings amongst investors during the dotcom boom of the 90s. The infrastructure wave belonged to Sunil Singhania who refused new money for Reliance Growth Fund in 2006 because he thought the market had heated up. Then there is Motilal Oswals Raamdeo Agrawal who picked Hero Honda very early. Professor Aswath Damodaran, who teaches corporate finance and valuation at the Stern School of Business in New York University, has worked in the US markets since he moved out of India in 1979. However, his teachings are a byword for fund managers across the world.

Our Wealth Wizards are not infallible either. They admit to failures even as they take pride in their successes. They are also optimists who have a long-term faith in equity investing. Many have followed the Buffett style of value investing but, at the same time, have created rules of their own and these are as significant a checklist on investing approaches as you can get.

Like any other skill, investing should be learnt from the best. However, it is also a personal thing, they say. Carve out your own rules and follow them strictly. And that, perhaps, is the biggest lesson from this exercise.

Chandresh Nigam, 45

Managing Director-CEO, Axis Mutual Fund

The investor community first noticed Chandresh Nigam when he, along with two other fund managers, took the spectacular call of selling the IT stocks in their portfolios in the late 1990s, much before the market crash of 2000. He was with Zurich Mutual Fund at the time. This wisdom of selling, recalls Nigam, stemmed from the fact that the fund had fared poorly in the mid-90s when the market was going through a rough phase. Their bibles included One up on Wall Street by Peter Lynch.

Stock prices may fluctuate but underlying businesses should be very solid. Companies which can sustain their business performance over the medium to long term are what one has to focus on, says Nigam, now managing director, Axis Mutual Fund. His mantra for building wealth is simple: Superior cash flows, high ROEs that are growing over a period of time.

He speaks from experience. In 1995, Nigam was with 20th Century Mutual Fund and came across an IPO from Sun Pharma. His team saw significant potential in promoter Dilip Shanghvi. But the stock did not move for almost four years. But when it did, the returns were manifold. Therein lies the key to smart investment: Patience in equity markets to create long-term wealth. And, often, it is the most difficult part. His how-to guide is crisp: At an individual stock level, look for long-term, sustainable and solid performances while at a portfolio level, control the risk. Create a portfolio in such a manner that you can control the downturn risk in bad market.

Image: Joshua Navalkar

Pravin Palande & Debojyoti Ghosh

Chaitanya Dalmia, 39

CIO, Renaissance Group

A conversation with Chaitanya Dalmia is likely to be peppered with quotes from Benjamin Grahams book The Intelligent Investor. Graham is considered the father of value investing, an approach Dalmia has followed for the last 15 years.

Value investing is the strategy of investing in stocks that the market has undervalued. Given this philosophy, Chaitanya, chief investment officer of his family-owned proprietary investment firm Renaissance Group, has learnt to look beyond the fundamentals of a stock. In a bull market, the fair value of a stock makes little sense. Let us say a stock is worth Rs 100 and I buy it at Rs 70 and sell when it hits Rs 100. But, in a bull market, this stock can go up to Rs 150 or more. We lose out on the gains if we stick to fundamentals alone, he says. Dalmia looks at the technical factors of a stock as well before deciding on exiting it.

His investment story is one of consistent success. Chaitanya had made outsized returns in PSU banks in 2002-2006. More recently, he enjoyed supernormal returns from the engineering/EPC space through companies such as Engineers India and KNR Constructions. Both were stock market investments; the family members together were the largest non-institutional shareholders in the former, and had a significant stake in the latter.

His advice for the retail investor: Keep SIP-ing in funds managed by credible and competent managers, and there is a decent chance of earning the best return adjusted for taxes, liquidity, risks, hassles and inflation over any 5-year period, he says.

Image: Amit Verma

Shabana Hussain

Raamdeo Agrawal, 57

Joint MD & co-founder, Motilal Oswal Financial Services Limited

Raamdeo Agrawals decision to buy the Hero Honda stock in 1997, when the company was valued at Rs 1,000 crore, is the stuff of legends. Hero MotoCorp, as it is now known, is at a market cap of Rs 50,862 crore (as on June 19). This call, he says, stemmed from his strategy that hinges on QGLB: Quality, growth, longevity and bargain value of a company. He began cultivating this skill early in his 35-year career.

His reading includes One Up on Wall Street by Peter Lynch, The Intelligent Investor by Benjamin Graham, and works by Philip Fischer and Warren Buffett. But he is most excited by Michael Porters ideas on competitive structure. In a vada pav business, you can make a lot of money, but in a sophisticated airline business, you can lose money. Why? Because of competition, says Agrawal. When you go to buy vada pav, you dont even ask the price, you dont check the change. But there are 10 guys offering you an airline ticket, and you look for the cheapest option.

However, he is worried about a trend in Indian equities over the past 15 years: A buying culture driven by speculation, not the underlying quality of a business for the long term. The government, Sebi, everybody, is out to make this market speculative. Nobody will listen because its easy money.

Agrawal urges investors not to be driven solely by market trends: If youre sure the company is making Rs 100 crore and will make Rs 1,000 crore in the next seven to eight years, just buy it. Dont bother about the market at all.

Image: Mexy Xavier

Shravan Bhat

Chandrakant Sampat, 86

Individual investor

In the 1950s, Chandrakant Sampat began investing in the capital markets. Back then, the Bombay Stock Exchange, though still an association of brokers, was a functional bourse. I got into the markets because it was relatively simple. All you needed was a cheque book and a pen. I identified opportunities out of listed issues, says Sampat, recounting a time when the Controller of Capital Issues fixed the price at which the public should get shares of listed companies.

Sampat is an autodidact who has spent decades honing the art of evaluating the actions, not the intent, of corporate houses. Its little wonder, then, that Sampat, now 86, is one of the countrys oldest and most respected investors.

In the 70s, he began betting on companies such as Hindustan Unilever (then Hindustan Lever) and Indian Shaving Products (now Gillette India) before they became investor favourites. He still swears by consumer goods firms. His advice is grounded in a heavy dose of reality and common sense: Investors should look for companies with the least capital expenditure, where the return on capital employed should not be less than 25 percent. It is also important to look for companies that distribute high dividends, he says. He suggests that investors keep their expenses down, invest in just six to eight companies and have faith in the power of compounding.

Sampat fears the impact of economic expansion on the earths depleting natural resources. We have become clever, but the wisdom is missing.

Image: Mexy Xavier

Salil Panchal