Rakesh Jhunjhunwala, the name that needs no introduction. The legendary investor who is known as the Warren Buffet of India. Let us check out the success story of Rakesh Jhunjhunwala and his journey from Rs. 5000 to 8000 Crore.
Rakesh Jhunjhunwala was born on 5th July 1960. His father was an Income tax officer. His father was interested in stocks and used to discuss the stock market with his friends. Rakesh as a child would listen to them. Once he asked his father why the prices fluctuate.
He told him to check the news, it makes the price to fluctuate. This was his first lesson in the stock market. He got fascinated by stocks and found it interesting.
He expressed his wish to get into the stock market with his father. He told him to do whatever he wanted in life but at least get professionally qualified. Rakesh then took up chartered accountancy and completed his CA in 1985.
After completing CA he told his father that he wanted to go in the stock market. His father reacted by telling not to ask him or any of his friends for money. Earn and trade with your money.
He started his career in 1985 when the BSE Sensex was at 150. 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 2–2.5 million. His first major successful bet was iron mining company Sesa Goa (now Vedanta). He bought 400,000 shares of Sesa Goa in forward trading, worth Rs 10 million, and sold about 2-250,000 shares at Rs 60–65 and another 100,000 at Rs 150–175. The price rose to Rs 2200 and he sold some shares.
Jhunjhunwala bought 6 crore shares of Titan in 2002-03 at an average price of around Rs. 3. The stock is currently trading at Rs. 1270 (07.02.2020) level and his investment value is now 8100 crore, which made around 35 lakh per hour for him.
In 2006 he bought lupin around Rs. 150 which is now trading at 1100 levels. He bought CRISIL around Rs. 200-300 levels which is now at 1800. Likewise, there are so many stocks in his portfolio that made huge money for him.
Rakesh Jhunjhunwala believes in the power of mistakes. He says it’s the mistakes that made him learn and become a better investor. he says. “If you don’t believe the markets are supreme, you will never admit that it was your mistake. If you don’t admit that it is your mistake, you will never learn.
To succeed in the stock market, not only is the ability to learn from one’s mistakes vital, he says, but also to blame only oneself for it. “I don’t blame the promoters of companies. I blame myself. The promoter is what he is. I have to recognize that. He is not what I expect him to be.”
Jhunjhunwala says what he has learned in life is to try and earn money in trading and to invest it in stocks.
His belief in India’s Growth story
Jhunjhunwala says he is bullish on the country growth since he entered the stock market. He insists the Indian economy will grow by 9-10 percent, though that may need a transition of two to three years.
Jhunjhunwala’s thesis is that Indians will save $1 trillion a year, and even if 10 percent of that money—$100 billion —flows into the markets, there will be a tsunami on the bourses. “So I remain bullish that, for the next 20 years, we could see a bull run like the one Wall Street had from 1987.”
His daily routine
He wakes up at 7.30 am and does some exercise. At 9 am he watches TV to get an update about the market opening. At 10 he gets ready for work after having breakfast. Around 11.30 am he reaches his office, talks to his people, check emails, reads articles, and watches the trading screen.
4 PM onwards he meets the people at the end of the trading hours. At 7.30 pm he leaves for home, after reaching home he plays with his children and looks into his daughter’s homework. At 9.30 pm he takes dinner and after 10 pm goes to bed.
Rakesh Jhunjhunwala famous quotes
“I have much more money than I need but much less than what people think I have.”
“Markets are like women, always commanding, mysterious, unpredictable and volatile.”
“Invest in business, not the company.”
Abhishek is an Engineer MBA in Finance and Certified Research Analyst. He is an active trader and investor in the stock market since 2010. Follower of the philosophies of Warren Buffet and Peter Lynch in investing and trend following in trading.