Big Bull Badshah of Dalal Street Rakesh Jhunjhunwala needs no introduction he is known as the stock guru and warren buffet of India. By profession, Rakesh Jhunjhunwala is a qualified Chartered accountant. He started his investment in the stock market when BSE Sensex was at 150 in 1985. He started his investment with 5000 Rs/- and now his portfolio worth is more than 33350 Cr. He passed away on 14th Aug, 2022. Now, his wife manages his portfolio as a partner in his asset management firm, Rare Enterprises. Jhunjhunwala’s portfolio of stocks is tracked religiously by many followers.
Rakesh jhunjhunwala is indeed a successful stock market investor. So the question arises what are the things/qualities that make Rakesh Jhunjhunwala a successful & billionaire Investor?
India has many so-called stock experts, traders stock analysts but none of the traders or stock analysts are as successful as Rakesh Jhunjhunwala. So with close observation, I could locate the following 5 secrets that make Rakesh Jhunjhunwala a successful billionaire Investor.
5 Secretes that make Rakesh Jhunjhunwala Successful Investor
#1 Capital
To make money you need money, this may not be true in many cases but in the case of the stock market, you need a lot of capital to become a zero to hero or to become a successful billionaire Investor.
But another big thing is capital can be made also. This is what Rakesh jhunjhunwala has done. How he has gone from a starting capital of Rs 5,000 to a net worth of a few thousand crore rupees is now the stuff of urban legend.
Rakesh Jhunjhunwala said in one of his interviews – “I had no capital when I came to the markets, and no father gifts and no father-in-law gifts. So I had to earn the capital to invest. How do you invest if you don’t have the capital? And I got the capital by doing future trading.”
In 1985 when Rakesh Jhunjhunwala started 5,000 Rs/- was said to be good capital for investment today you at least required 2-3 Lakh as initial capital to start investing in the stock market.
Top 5 Stocks of Rakesh Jhunjhunwala Source of Learning
#2 Knowledge
In today’s world for every business or job, you need relevant experience and skills. Without knowledge and experience, one cannot get a good job or cannot establish a good business. The same is true in the case of investment & stock market.
You require specific knowledge and skill sets to become successful like Rakesh Jhunjhunwala.
Rakesh Jhunjhunwala said “Markets are about money, but markets are also about knowledge. Markets are also about egos; markets are also about the satisfaction of having been proved right. Especially, when that right is from an original thought and not from a guided source or following somebody.”
You need to do a lot of research, a lot of data gathering, and a lot of knowledge accumulation before investing in the stock market.
#3 Right time Right Decision
For every investment you make a time of investment matters, especially in the stock market, you have to be selective and have to pick the right stock at the right time. Rakesh Jhunjhunwala is the master of that, he picks the correct stock at the correct time.
He made his first big profit of Rs 0.5 million in 1986 when he sold 5,000 shares of Tata Tea at a price of Rs 143 which he had purchased for Rs 43 a share just 3 months prior. Between 1986 and 1989 he earned Rs 20-25 lakhs. His first major successful bet was the iron mining company Sesa Goa. He bought 4 lakh shares of Sesa Goa in forward trading, worth Rs 1 crore, and sold about 2-2.5 lakh shares at Rs 60-65 and another 1 lakh at Rs 150-175. The price rose to Rs 2200 and he sold some shares.
So right from the beginning, he has the quality to select the right stock and click the correct deal at the correct time. This is an important quality to become successful in the stock market.
#4 Patience
Controlling emotion and keeping patience is extremely important in the stock market. The stock market moves upward as well as downwards. During a downtrend or during a market crash one should maintain patience. In other words, one should have faith in investments made in stocks.
Jhunjhunwala’s stocks fell by up to 30% in December 2011. But he has the quality to keep patience and that patience pays its fruit. He recovered his losses in February 2012. This year his portfolio has given around 35% returns.
#5 Vision
I believe that if a person can dream up something he/she can do it. It may take time and effort and persistence but it’s not impossible. I believe dreams are worth fighting for because they are a representation of our truest selves and our innate abilities.
In the words of Industrialist Dhirubhai Ambani “Only when you dream it you can do it.” Or “For those who dare to dream, there is a whole world to win!”
According to me, Rakesh Jhunjhunwala is a visionary. He started with a capital of Rs 5,000 in 1985 and now in 2022, he is sitting on a portfolio worth 33350 Cr. To start with Rs 5,000 and to reach Rs 33000 Cr in the stock market is indomitable. He sees Dreams and can turn a dream into reality.
To be successful in the stock market like Rakesh Jhunjhunwala one must have a vision.
There could be many other factors responsible for the success of Rakesh Jhunjhunwala but preliminary I could find the above 5 things that make him successful in the stock market.
Investment Philosophy of Rakesh Jhunjhunwala
Rakesh Jhnunjhunwala’s stock-picking strategy is influenced by George Soros’s trading strategies and Marc Faber’s analysis of economic history. He endorses the rule, “The trend is your friend.”
His investment philosophy says “Buy right and hold tight”.
He admits to having been a bear in the Harshad Mehta days and believes that investors should be like chameleons. He has said that the markets are temples of capitalism and believes that they are the ultimate arbiters.
He claims to base his trades, in part, on the business model of a company, its growth potential, and its potential for longevity. He factors in heavily the competitive ability, scalability, and management quality of the enterprise. The entrepreneur, according to Jhunjhunwala, makes an invaluable difference to his expected investment returns. According to Jhunjhunwala, believing in the vision and the beliefs of the entrepreneur and evaluating risks that may not be perceived by the entrepreneur are key success factors for a trader.
Final Words
In end I would like to share with you a famous quote from Evan Esar on Success
“Success is the good fortune that comes from aspiration, desperation, perspiration, and inspiration.”
