Monday, March 1, 2010

Rakesh Jhunjhunwala (a biographical sketch)

Rakesh Jhunjhunwala


Qualification = Chartered Accountant

In 2007, Forbes rated him as India's 51st and the world's #1062 richest man with wealth of $1.1 billion!

Partner in his asset management firm, Rare Enterprises.

'India's Warren Buffett'. (Jhunjhunwala has never met Warren Buffet but admires and even follows his style of investment.)

Stays at Malabar Hill and works from his office at Nariman Point in South Mumbai.

Well known among the investing circles as 'Rocky' and among his close associates as 'Bhaiyya'.

Considers Mr Radhakrishnan Damani as his guru and best friend.

Son of an income tax officer.

Started indulging in stocks while in Sydenham college and plunged into investing as a full time profession soon after completing his education.

He started his career with $100 in 1985 when the BSE Sensex was at 150

Self-belief, healthy influences and inspiration carried him thru many initial hurdles.

He learnt very early that "No gain without pain"!

Made his first big profit of Rs 5 lacs in 1986 when he sold 5,000 shares of Tata Tea at a price of Rs 143 (purchased 3 months ago @ 43).

Between 1986 and 1989 he earned Rs 20-25 lakhs.

His first major successful bet was iron ore mining company Sesa Goa. (Bought 4 lakh shares of Sesa Goa worth Rs 1 crore, Sold about 2-2.5 lakh @ Rs 60-65 and another 1 lakh @ 150-175. The prices then went up to Rs 2200!)

Madhu Dandavte's Union budget of 1990 boosted his investing career which increased his net worth by 5 times!

Jhunjhunwala is a long term investor, however he acknowledges that it was 'trading' income which helped him built his initial capital base!

His stock picking strategy is influenced by George Soros & Dr Marc Faber.

He swears by 'trend is your best friend'.

He is a bull these days but admits to have been a bear in the Harshad Mehta days. He believes that a successful trader should be like a chameleon.

He gives top priority to 'competitive ability', 'scalability' and 'management quality' of the enterprise.

The typical traits to look for while identifying potential multi-baggers, according to Mr Jhunjhunwala are - low institutional holding, under-researched and general pessimism about the stock.

A good time to Sell a stock when the 'earnings' expectations have peaked or the valuations appear ridiculously unreasonable.


His Prayer

"God’s Grace, Elder’s Blessings"

His Aim

"To win all wars despite losing many a battle"

His Motto

"Where the head is held high, and the mind is without fear . . ."

His self-caution

"Ambitions cannot overshoot market opportunity"

His mantras =

"Understand the importance of liquidity"

"Buy right, hold tight – exit in frenzies"

"Don't be afraid to make mistakes, but affordable ones"

"Learn to be an independent thinker"

"No religion, no emotion, no ego"

"With discipline, emotion-less leverage has magic"

"Patience is born out of conviction"

"Be greedy, but be long-term greedy. Understand the role of time"

"India’s growth and it’s equity returns can be delayed, not denied."

"US Economy has to slow down"

"Aftermath of a 25 Yr bull market in the US will not be easy"

"Whatever you can do or dream you can,begin it. Boldness has genius, power and magic in it."

"Do something you love"

"Aspire, but never envy"

"Be paranoid of success–never take it for granted."

"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"

"Trading is against human nature. In trading, the first and the last principle is that trading is trend and price based, and not opinion based. This requires you to square an unfavorable trade regardless of your opinion. This means that if I buy a stock at Rs 100, and then the price falls to Rs 95, I take my loss and square off my trade. This is counter-intuitive to most people. This is the one common quality of all successful traders."

(Compiled and edited from various sources on the net)

No comments: