Friday 15 February 2008

rediff.com: Words of wisdom from Rakesh Jhunjhunwala

One of India's savviest stock market players, Rakesh Jhunjhunwala has been called the 'pin-up boy of the current bull run.'

It's an epithet that sits lightly on his shoulders. A chartered accountant with a penchant for dabbling in stocks with an uncanny eye for success, Jhunjhunwala started as a trader and investor in 1983. He now runs his Rare Enterprises company from offices in Mumbai's Nariman Point business area. What earned Jhunjhunwala fame is his skill to pick under-valued stocks, thus earning him the sobriquet: India's Warren Buffett.

Talking about his company RARE (derived from the first two letters of his name and that of his wife Rekha) Enterprises, Jhunjhunwala says, "My company has only one client -- my wife -- so that I don't need to handle others' money."

So check out what India's Warren Buffett has to say about investing in the stock markets.

'Enter the market when no one else does'

Jhunjhunwala takes the cue from Warren Buffett when he says: "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."
  • Don't follow stock picks by big investors
  • Remember: the market is always right
  • You can never be taught about market, you have to learn it
  • You must balance fear and greed

    Jhunjhunwala says he is 'well invested' in key growth areas like banking, retailing and infrastructure, all of which are based on India's domestic performance.

    His private equity interests offer more detail -- education (private schools in Mumbai), hospitals and health care, a security company, pharmaceuticals, and dredging.

  • 'Markets are like women -- always volatile'

    "Markets are like women -- always commanding, mysterious, unpredictable and volatile," 'Big Bull' Rakesh Jhunjhunwala had told a gathering in Mumbai a few months back.

    For Jhunjhunwala, trading by the hunches is the best thing to do. "If in doubt, listen to your heart," is what he tells young investors. Given below are some investment gems from him:

  • Be optimistic
  • Be opportunistic
  • Study the market thoroughly
  • Maximise profits and minimise losses
  • Invest in a business not a company
  • Have an independent opinion, always
  • Be happy with your gains but take losses in your stride
  • Be prepared for risks
  • Despite sharp corrections, early this year Jhunjhunwala predicted that the Indian markets will reach its peak by 2010

  • 'Markets plunging? Don't sell in panic'

    Jhunjhunwala states that there is nothing to fear despite a sharp plunge in the Sensex this year. He assures investors thus:
  • Nothing has changed as the Indian market is 'deep-rooted'
  • Corrections, however sharp, are indispensable
  • Panic selling during a sharp fall is the worst thing to do
  • Stay invested and calm when the markets nosedive
  • The country is poised to soon achieve a double-digit economic growth along with an impressive corporate profit growth
  • This is bound to drive the bourses
  • It does not take rocket science to understand that India's economic growth will be in double digits

  • Tips for beginners

    And for beginners in the stock market, this is what he has to say:
  • Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it
  • Do something you love
  • The means are as important as the end
  • Aspire, but never envy
  • Be paranoid of success -- never take it for granted. Realise success can be temporary and transient
  • Build a fighting spirit -- take the bad with the good
  • When you see a horizon, it seems so distant. When you reach that horizon, you will realize how many more horizons are within reach
  • Jhunjhunwala said enormous wealth was created over the last five years because opportunities in India have grown manifold. Admitting that gains were going to be moderate in future unlike the manifold rise over the last few years, he advised investors to be realistic in their expectations.


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