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Whenever one thinks of stock markets in India the first successful name that comes to mind is Rakesh Jhunjhunwala. A great trader and investor, his interviews always inspired people who benefited from his experience and wisdom. But unfortunately, he passed away at the age of 62, and good things many a time come to an early end.
Rakesh Jhunjhunwala was often compared to Warren Buffet who is called the “Oracle of Omaha” and in the same way was called the “Oracle of Dalal Street.” The similarity was that both had Midas touch and were able to spot businesses and companies at fair value. Just as Warren Buffet is the biggest investor on Wall Street so was Rakesh Jhunjhunwala the biggest investor on Dalal Street.
The returns generated by some of the stocks that he picked are as given below-
Besides these, there are many companies where he invested and generated a humungous amount of wealth. Rakesh Jhunjhunwala got interested in the stock market after listening to his father’s discussions with his friends on the stocks. He began his career with Rs. 5000 and was estimated to be around $ 5.6 billion at the time of his death.
Initially, Rakesh Jhunjhunwala borrowed money from his brothers’ clients at a high-interest rate to trade and invest in the stock market. The initial part of his career was as a short seller on Dalal Street. Over the years he perfected his skills as an investor. Some of the quotes that can be recollected from his interviews are-
1) Never invest at unreasonable valuations. Never run for the companies which are in the limelight.
2) Always respect the price. At every price, there is a buyer and a seller. Only the future decides who is right. Learn to respect you can get wrong.
3) Make mistakes. Make a mistake that you can afford so that you live to make another one. But never repeat the same mistake.
4) What matters is how much money you made when you were right and how much you lost when you were wrong.
5) Talking about risk, he said, “Beware of this four-letter word. Only invest what you can afford to lose in the short term.
6) Stock markets are always right. Never time the market. “The only rule I have is there are no rules.”
7) When there is doom and gloom, don’t forget there is darkness before the dawn.
8) Nobody can predict the weather, death, market, and women. The market is like a woman, always commanding, mysterious, uncertain, and volatile. You can never really dominate a woman and likewise, you cannot dominate the market.
9) You know, a balance sheet is like a bikini, it shows more but it hides what is vital. I learned to read a balance sheet and then I got fascinated by stocks.
10) Hastily taken decisions always result in heavy losses. Take your own time before putting money in any stock.
11) Respect the market. Have an open mind. Know what to stake. Know when to take a loss. Be responsible.
12) Always go against the tide. Buy when others are selling and sell when others are buying.
13) Prepare for losses. Losses are part and parcel of stock market investor life.
14) Anticipate trends and benefit from them. Traders should go against human nature.
15) Emotional investment is a sure way to make losses in stock markets.
16) Stock markets are always right. Never time the market.
17) Invest in companies that have strong management and competitive management.
18) Trading always keeps you on your feet, it keeps you alert. That’s one of the reasons why I like to trade.
19) 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.
20) I told my father I wanted to go to the stock market. My father reacted by telling me not to ask him or any of his friends for money. He, however, told me that I could live in the house in Mumbai and that if I did not do well in the market I could always earn my livelihood as a chartered accountant. This sense of security really drove me in life.
21) In India, one has to have faith in equity. What are the alternatives – real estate, debt? If the debt can give you 6 percent, equity can give you 15 percent.
22) If you have a company called x and today you feel the price is very high. Next year it could perform very well but the price may not perform. So in the stock market what happens is buy on the rumor, and sell on the news.
23) Success should not make you think you are God’s gift to mankind. You should never forget that you are what you are because God chose you to be there.
24) In my 25-30 years of experience in the markets, just as you cannot have a good relationship with a woman by bullying her, you cannot have a good relationship with the market by trying to bully it or saying that you are the king. The market is king.
25) People will laugh at me, but when they ask me to make a wish for the next life; I will say I want the same parents, same brother, and sister, same wife, same friends.
Trading and investing in the stock markets will go on as usual. Rakesh Jhunjhunwala would be remembered for decades to come and his investments would be studied for a long time. But there would be very few who would be able to inspire the common man to invest and come up in life in a single generation.