The maverick of Dalal Street, Rakesh Jhunjhunwala’s recent passing has left an irreparable hole in the investment world. The stock market guru’s journey from a meager ₹5,000 investment in equities to building an empire worth $5.8 billion is nothing short of a fairytale driven by hard work and piercing strategy.
In this blog, we have curated 11 smart investment tips from the grandmaster of the stock market himself. Read on to get inspired!
1. Build the Ability to Bear and Sit Through Losses
Rakesh Jhunjhunwala once said, ‘’You cannot make profits in the stock market unless you have the ability to bear losses.” It is impossible to make profits on every trade or every investment. A few bad decisions can cause losses when dealing with any market. That said, one must build the ability to digest a few losses every now and then. Any factor can cause a stock or an asset to plunge. It is important to take it positively and not let losses hamper your spirits.
2. Invest in Fundamentally Sound Companies and Management
“Invest in companies which have strong management and competitive management.” – Rakesh Jhunjhunwala
Rakesh Jhunjhunwala’s portfolio and journey are a strong depiction of this statement. Personally, as an investor too, Jhunjhunwala had mainly placed his bets on companies with solid management and fundamentals. He strongly believed that leadership is ultimately what a company is.
A great tip from Jhunjhunwala, it is ideal to stick to companies that have sound management and offer something more than their peers.
3. Keep your Emotions in Check
Rakesh Jhunjhunwala once stated that emotional investment was a sure way to make losses in stock markets. There can be no truer statement than this. Emotional investing can be an invitation to disaster. Getting attached to your failures or taking market events personally will not help you as an investor.
Say, for instance, you placed a bet on a company which tanked. Take a moment, analyse and move out. There is no point in taking the event personally. Gains and losses are part and parcel of markets.
4. Avoid Companies with Inflated Valuations
Investors always get attracted to companies with high valuations and those in the limelight. They do no research or analyse the true standing of the company.
Such impulsive investing can acutely damage your portfolio. Not all valuations are just, and not all limelight is great. Studying a company by decluttering the noise and valuation hype is important to understand its worth as an investment opportunity.
5. Learn to Read the Markets
Jhunjhunwala, in his witty style, cautions investors on the nature of markets – commanding, mysterious and unpredictable. There is no denying this fact.
Markets can be more unpredictable than one may like to believe. Your investments may go for a ride in many situations. However, hold on to fundamentals, and you shall yield well.
6. Analyse Financial Statements and Standing of a Company
It is no hidden fact that Rakesh Jhunjhunwala had been an avid reader of the balance sheets and financial statements of the companies he chose to invest in. The ace investor had stuck to this habit since his days in school and college. Nothing changed when he entered the investment world.
For any investor, it is paramount that he reads and well understands the financial statements and standing of a company. It is impossible to succeed in markets if you cannot decipher hidden and direct information about a company.
7. Keep an Eye Out for New Opportunities
“When opportunities come, they can come through technology, marketing, brands, value protections, capital, etc. You need to be able to spot those.”- Rakesh Jhunjhunwala
Rakesh Jhunjhunwala highlighted the importance of studying a market above charts, numbers, technicals and more. Tech, marketing, brands etc., are taking over the modern world and establishing a ‘never felt before’ presence.
Look for companies importing and investing in new technologies and methodologies. It is important to spot opportunities before others to gain true benefits.
8. Respect the Market and Learn from Experience
It is a known fact that Rakesh Jhunjhunwala always treated markets as his Guru.
As investors, it is important to respect the markets, be responsible and learn from all good and bad experiences. Be open to new companies and happenings in the markets and understand when a tradeoff should be made.
9. Always Stay Alert
Trading is no easy task. It requires one to constantly be on their feet. A lazy and laid-back attitude will not take you very far and can be fatal to your career in the field of equities.
If you want to profit from the markets, you need to be alert 24/7. Follow news, follow companies, research what they are doing and track them continuously.
10. Do Not Follow the Herd Mentality
Rakesh Jhunjhunwala, just like legendary Warren Buffet, had a simple mantra – Buy when others sell and sell when others buy. The reason why ace investors vouch for this mantra is that herd mentality is not always right.
If you have faith in the company, your investment will reap benefits regardless of market fear and sentiments, regardless of where the market goes. Your belief should not be shaken by market moods. Simply be greedy when others are fearful and vice-versa.
11. Be Patient
Investing is a long-term game. If you are looking for short-term gains, you will likely be disappointed. Like Rakesh Jhunjhunwala said, ‘Give your investments time to mature. Be patient for the world to discover your gems’
If your investment is in the right company, you will reap the benefits in the long run. Now let’s take a look at Rakesh Jhunjhunwala’s portfolio, his net worth and more.
Rakesh Jhunjhunwala’s net worth is $5.8 billion or ₹46,000 crore. Here’s his share list:
|Stock||Holding Value (₹)||Quantity Held|
|Tata Motors Ltd.||1,744.7 Cr||36,250,000|
|Star Health and Allied Insurance Company Ltd.||7,091.6 Cr||100,753,935|
|Fortis Healthcare Ltd.||913.8 Cr||31,950,000|
|NCC Ltd.||511.9 Cr||78,333,266|
|Federal Bank Ltd.||838.2 Cr||75,721,060|
|Rallis India Ltd..||429.6 Cr||19,068,320|
|Tata Communications Ltd.||335.2 Cr||3,075,687|
|Edelweiss Financial Services Ltd.||86.4 Cr||15,125,000|
|Agro Tech Foods Ltd.||155.9 Cr||2,003,259|
|Aptech Ltd.||213.2 Cr||9,668,840|
|NCC Ltd.||511.9 Cr||78,333,266|
|Crisil Ltd.||1,306.2 Cr||4,000,000|
|Titan Company Ltd.||11,189.2 Cr||44,850,970|
|Metro Brands Ltd.||3,356.8 Cr||39,153,600|
|Jubilant Pharmova Ltd.||372.3 Cr||10,770,000|
|Canara Bank||826.0 Cr||35,597,400|
|Indiabulls Housing Finance Ltd.||69.6 Cr||5,500,000|
|Karur Vysya Bank Ltd.||229.9 Cr||35,983,516|
|Indian Hotels Company Ltd.||826.2 Cr||30,016,965|
Also Read: 7 Investment Tips by Rakesh Jhunjhunwala
The legendary investor Rakesh Jhunjhunwala’s personality was not just limited to the equity markets. In a true sense, the big bull was bullish on India and its growth. He had the ambition of entering the risky field of aviation, which he successfully did by launching Akasa Airlines, India’s most economical aviation company.
Unfortunately, this was his last project, as his health deteriorated beyond repair. On 14th August 2022, Rakesh Jhunjhunwala breathed his last. Even in his last days, Jhunjhunwala’s spirit could not be broken. He attended the launch of his ambitious project (Akasa Air) in a wheelchair and was witnessed dancing to Bollywood songs and enjoying the spirit of life.
In his last days, Rakesh Jhunjhunwala, the Guru for many investors, the man with Rs. 40,000 crores of net worth, made a heart-breaking statement. He said, ‘My worst investment has been my health. I would encourage everybody to invest in that the most’.
There can be no better advice from the man himself.
Rakesh Jhunjhunwala was one of the greatest Indian investors of the last 2 decades. His dedication and love for markets are highlighted throughout his journey in the Indian stock markets. The ace investor also had a long-term vision for India and was confident about the country’s growth for the next few decades. Budding investors look up to him and his investment tips would remain golden for years to come.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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