The late Rakesh Jhunjhunwala‘s investment style emphasized patience, the ability to spot long-term opportunities, learning from mistakes, avoiding market predictions, and understanding valuations. His wife, Rekha Jhunjhunwala, inherited the portfolio after his death.
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Rising from ₹5,000 in 1985 to a staggering ₹35,000 crore by 2022, the life journey of India’s Big Bull, the late Rakesh Jhunjhunwala, stands as an investment masterclass. He was often referred to as India’s Warren Buffett though he would humbly say that Buffett was ‘far ahead of him’.
“It’s not a fitting comparison (with Warren Buffett),” he had once told news agency Reuters in an interview in 2012. “In terms of wealth and success and maturity, he’s far, far ahead.”
India’s one of the most successful investors Rakesh Jhunjhunwala left the world on August 14, 2022. But his legacy lives and shall endure for generations to come.
Jhunjhunwala invested in several companies across sectors under his name and his wife’s name Rekha Jhunjhunwala. He also invested through his privately-owned investment advisory and asset management firm Rare Enterprises. After his death, Rekha Jhunjhunwala inherited the portfolio.
In the last one year, Jhunjhunwala’s portfolio has grown significantly. The net worth of his portfolio stood at ₹25,397.54 crore at the end of the June 2022 quarter which swelled to ₹38,366.4 crore by the end of the June 2023 quarter, according to Trendlyne data.
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What made Jhunjhunwala India’s most successful investor?
Jhunjhunwala made the most of his wealth by investing and not trading. Even though trading played a crucial role in collecting money in the initial days, he generated real wealth by investing in quality stocks for the long term.
Here are five lessons that one can learn from Jhunjhunwala’s investing style
1. Patience: His patience, probably, was the biggest factor behind his success. Additionally, his calmness during market turmoil, too was an attribute worth-imitating. He believed one should take time before making a bet and believes emotional investment without proper research are certain ways to suffer losses.
“Hastily taken decisions always result in heavy losses. Take your own time before putting money in any stock,” Jhunjhunwala said.
2. Ability to spot long-term opportunities: Jhunjhunwala was a master in spotting opportunities and he believed in the importance of having patience and a long-term outlook in investing. For example, he was able to spot the long-term potential of Titan in its early days. And he was so correct as the stock has been one of the biggest wealth creators for him.
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3. Learning from mistakes: Jhunjhunwala was quick in learning from mistakes and he was not afraid of making mistakes. But he never believed in going beyond a boundary. As he said once, “I am not afraid of making mistakes. But my mistakes were those that I could afford. That’s very important: mistakes will happen but you must ensure that you keep them within limits you can afford.”
4. Never try to predict the market: One of the most important lessons from someone of his calibre, who has attained monumental success in the market, is that one should never try to predict the market.
“You can never predict how the market will react. You can model it. You may try to predict it, but weather and markets and risk, only God knows because only he has seen tomorrow,” he said.
5. Valuation is important: One must understand the valuation of a stock before investing in it. A stock bought at a comfortable valuation has a significant chance of going up. However, a buzzing stock at a premium valuation can be a sure way to suffer losses.
“Never invest at unreasonable valuations. Never run for companies which are in the limelight,” Jhunjhunwala said.
