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Saturday, January 28, 2023

Unmissable Investment Lessons From Rakesh Jhunjhunwala: India’s Richest Self-Made Investor, Billionaire

Rakesh Jhunjhunwala, born on July 5, 1960, passed away on August 14, 2022, at the age of 62.

Known as India’s Warren Buffet, Rakesh was born into an Indian middle-class family. His investment in the stock market began while he was still in college. When the BSE Sensex was around 150 points, he began investing with Rs 5,000 as capital.

From Rupees 5000 to $5 billion

As of July 5 2022, Rakesh Jhunjhunwala’s net worth stood at $5 billion (Rs 39,527 crore) which is a 15% increase in one year as last year the net worth stood at $4.6 billion (Rs 34,387 crore).

This year marks the completion of Jhunjhunwala’s 36th year on Dalal Street. As per the latest corporate shareholdings filed, what started as a measly capital of Rs 5,000 is now a net worth of over Rs 25,842.3 crore.

According to data by Trendlyne, his stocks include the likes of Titan Company, Tata Motors, Star Health and Allied Insurance Company, Metro Brands, Fortis Healthcare, Nazara Technologies, Federal Bank, Delta Corp, DB Realty and Tata Communications.

His most valuable listed holding is watch and jewellery maker Titan Company, with a holding value of Rs 8,830.9 crore; Star Health and Allied Insurance Company with Rs 4,957.1 crore; and Metro Brands at Rs 2,391.3 crore.

Jhunjhunwala attributes his success in wealth creation to firm belief in India’s growth potential.

Top Lessons From Rakesh Jhunjhunwala

The following are the top 7 lessons we can learn from him

  • ‘Bhav Bhagwan Hai’: According to the Big Bull, always respect the price. At every price, there is a buyer and a seller. Only the future decides who is right. Learn to respect what you can get wrong.
  • Be An Optimist: One must fall under the opportunistic and optimist categories if one has to call himself an investor.
  • ‘Emotional Investment’- According to the ace investor, mixing emotions with logic is a sure shot to lose money. Rather than going for the favorite stock, one must analyze well.
  • Don’t borrow to invest: Markets may remain irrational more than the rational being can stay solvent.
  • Risk: He advises investing only when one can afford to lose money in short term
  • You Can’t be Right All The Time: Its impossible never to be wrong. Its just that one’s gains should outnumber one’s losses.
  • Patience: How can we skip the good old patience? Rakesh Jhunjhunwala’s immense patience with his stocks is his stark idiosyncrasy. He says if the fundamentals of the business are intact, he does not even sell a single share. He has seen so many stock market cycles that he doesn’t really get scared from the occasional Stock Market corrections. He knows that the next market would take care of all his problems.

According to him, bull markets are Test matches and not 50-over one-dayers.

Jhunjhunwala believed that India is entering a new growth phase, with a double-digit run rate this year and for the next few decades.

In an interview last month, he projected corporate profits in FY22 to be 5-6% of GDP. He said that structural changes have taken place in the economy are coming to the fore.

The legacy he left behind will live on forever!


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