Rakesh Jhunjhunwala - Investment Principles Insights

Rakesh Jhunjhunwala - the man called as Indian Warren Buffet!!! He is also called as 'pin-up boy of the bull run.'

He is a Chartered Accountant by profession and is one of the better known equity investors in India. He has been a keen and active participant in Indian capital markets since 1983 when he started as a trader with a small capital of Rs.5000. According to recent news, his portfolio is worth of Rs. 2294 crores and total net worth is considered to be Rs. 6000 crores

He and his wife came into the limelight with CRISIL Limited. At the end of April 2005 he was holding 14.26% of the company, accounting for Rs 70 crore. In the same year the couple made Rs 27 crore after they sold out to the S&P open offer at Rs 775 per share. In India, bull runs have been associated with certain individuals. In the nineties it was Harshad Mehta and in early 2000 it was Ketan Parekh. But Jhunjhunwala does not like to be associated with any booms. He believes that the market is above individuals. “The market is rational. An individual can never be smarter than the market”, he says.

For your information, some his portfolio constituents are: Titan Industries, Praj Industries, Aptech, Lupin, CRISIL, Nagarjun Construction, Geojit and 10 more.

Checkout: Rakesh Jhunjhunwala's Latest Portfolio-September 2008

Success secrets:
He is an expert in picking value stocks when no one is noticed them. He invested in stocks like BEML and other PSU Stocks when everyone looked at technology stocks in early 2000.

Confine your portfolio to 15-20 stocks. Invest for long term to get good returns.

To get exceptional returns, you need to take risks.

He generally stays away from commodity stocks and index stocks. But he recently bought some steel stocks.

Like Jack Welch of GE, he believes in extensive reading and learning.

Be an optimist. Pessimistic investors always lose money in stock markets.

If you believe in the growth prospects of a company, invest in the stock and give it sufficient time.

Greedy investors will never make money in stock markets. Book profits after reaching your target price.

Never put your hard earned money without proper research. Never invest according to Stock tips.

You have to lose many a battle to win the war. This Winston Churchill quote is always quoted by Jhunjhunwala. Balance fear and greed.

Stock markets are always right. Never time the markets.

Prepare for losses. Losses are part and parcel of stock market investor life. Learn from mistakes. Learn to take a loss.

Rakesh Jhunjhunwala's latest portfoli0 as in April 2008
Rakesh Jhunjhunwala's old portfolio as on December 2007

Some of his famous quotes:

* "Markets are like women -- always commanding, mysterious, unpredictable and volatile,"
* Anticipate trend and benefit from it.
* Don’t insult the great man (Warren Buffett) by comparing me to him.
* Successful investors are opportunistic and optimistic ones.
* Growth comes out of chaos.
* Emotional investment is a sure way to make loss in stock markets.
* Be happy with your gains but learn to accept losses with a smile.
* Be opportunistic but wait for the right moment.
* Study the market thoroughly. Refer to history.
* Asked how much patience should an investor have, Jhunjhunwala said, "Get married and you will understand how patient you need to be."

"Patience may be tested, but conviction will be rewarded," he asserted. He appealed to the budding investors to go by what George Soros said: 'It's not important whether you are right or wrong, it more important how much you lose when you are wrong and how much money you make when you are right.'

* "If in doubt, listen to your heart".
* Have an independent opinion, always.
* Panic selling during a sharp fall is the worst thing to do.

"The market," he says, "is always right. Markets cannot be taught, they have to be learnt."

** Day Trading and stocks futures & options are highly risk oriented trading means. Value investing is the investment pattern being followed by most successful investors allover world; be it Rakesh Jhunjhunwala or Warren Buffett! Happy Investing!! **