Rakesh Junjunwala
Birth Place: Mumbai, India.
Birth Year: 5th July, 1960.
Net Worth: 1.9 Billion USD (2015)
Most famous for:
Jhunjhunwala has been described by India Today magazine as the "pin-up boy of the current bull run" and by The Economic Times as "Pied Piper of Indian bourses".
Many consider him as the Indian version of Warren Buffet. He is also sometimes referred to as 'The Golden Hand' of Indian stock market. People believe that everything he touches (invests) turns to gold. Such is his popularity that there are people who track his portfolio and invest in the same companies that he invests.
How did Junjunwala start:
Junjunwala's father was interested in stocks and used to discuss about the stock market with his friends. Rakesh as a child would listed to them. Once he asked his father why the price fluctuate. He told him to check the news, it makes the price to fluctuates. This was his first lesson of stocks market. He got fascinated by stocks and found it interesting. He expressed his wish to get into stock market to 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 the 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. Junjunwala found RARE Enterprise his only invetment firm that looks after his investment. RaRe Enterprise(‘Ra’ stands for Rakesh Jhunjhunwala, ‘Re’ stands for Rekha)
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 20–2.5 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 390 Rs level and his investment value is now 2100 crore, which made around 35 lakh per hour for him. In 2006 he bought lupin around 150 Rs which is now trading at 1100 levels. He bought crisil around 200-300 levels which is now at 1800. Likewise there are so many stocks in his portfolio that made huge money for him.
Jhunjhunwala is the chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd. and sits on the board of directors of various Indian companies such as Prime Focus Limited, Geojit BNP Paribas Financial Services Limited, Bilcare Limited, Praj Industries Limited, Provogue India Limited, Concord Biotech Limited, Innovasynth Technologies (I) Limited, Mid Day Multimedia Limited, Nagarjuna Construction Company Limited, Viceroy Hotels Limited and Tops Security Limited.
Junjunwala's style of investing:
1) Buy for long term
Though he is investing in the stock market, he is not a short term trader. He invests in stocks for the long term. And this strategy has paid off for him. Some of the stocks he owns have multiplied his wealth over the years. Had he sold them the moment they appreciated by 10-20 per cent, we wouldn't have been talking about him now.
2) Belief in India's growth story
He is one of those guys who believes strongly in India's growth story. He says again and again that Indian economy will keep growing. So, be a part of it. The only way you can be a part of a growing India is to invest in its stock market. If you are investing in debt instruments like fixed deposits or bonds, you will not be able to reap multifold returns by any means.
3) Search for value
Rakesh Jhunjhunwala believes in value oriented companies. He has his team who helps him in finding companies which offer value in the long term. If the stock prices of these companies are higher now, he tends to wait a bit, but finally gets his hands on them.
Before buying a stock, he closely studies its management style, growth potential, competitive nature and many more factors.
4) One cannot create wealth through free advice
In an interview given to Mumbai Mirror, he has said that one cannot make wealth through borrowed advice. You need to do your own research before making any investment. Free advice can actually cost you later. If you blindly follow someone's free advice, you might not be paying them anything now but you will realise later when those investment turn out to be duds. That loss can be a lot more than the fees that you pay for an expert's advise.
5) Invest only in what you know
He invests only in companies whose business he can understand. He does not opt for complex businesses. 'Keep it simple' is his strategy when it comes to investing.
6) Consistency
If it's done once, it could be a lottery. But if it's done again and again, we call it consistency. This is what Rakesh Jhunjhunwala is known for. He consistently invests in the stock market irrespective of the conditions. The quantum or strategy of investing can differ based on those conditions but he has never left his belief that stock market will always deliver for you if you do everything right.
7) Success comes from failure
It's not that he has not tasted failure. Some of his investments have also been duds. He believes that success springs out of failures. If you fail, instead of crying over it you should know why you have failed. Did you not read the business well? Were the markets hit by some bad news?
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