Teachers’ Day 2024: 6 Investment Lessons From Ace Investor Rakesh Jhunjhunwala

Veteran investor Rakesh Jhunjhunwala passed away on August 14, 2022 due to sudden cardiac arrest but left behind a legacy filled with key lessons for scores of investors. He started his journey in share market with a mere Rs 5000 investment in 1985. He used to hear his father's discussion about share market with his friends and soon developed keen interest. His father encouraged him to read newspaper regularly to find about the trends of stock market. When the ace investor intended to invest in share market, Jhunjhunwala's father refused all financial help and asked him not to seek any help from his friends as well. He asked him to go through newspaper every day to comprehend the nitty gritty of share market. Popularly knowns as the Big Bull of Dalal Street and frequently referred to as the Warren Buffet, Jhunjhunwala approached the stock market with patience, vast research, and took calculated risks. The ace investor earned huge profit in 1986 after he bought 5000 shares of Tata Tea at Rs 43 and in just 3 months the shares more than tripled to Rs 143.

Rakesh Jhunjhunwala's major investment was in Titan Company Jhunjhunwala also ventured into the aviation industry with Akasa Air which took flight on August 7, 2022. Jhunjhunwala used to donate 25% of his earnings towards charity. In 2020, he contributed of 25% of his wealth to charity. As we celebrate Teachers's Day today, below are the top 6 lessons by Rakesh Jhunjhunwala:

Key Lessons From Rakesh Jhunjhunwala:

Never Rely On Stock Market Tips: Rakesh Jhunjhunwala emphasised on developing a passion for stock market. The ace investor believed that one can never develop a passion for share market if they rely on stock market tips. He gave emphasis on regular reading of financial news and discussing with others who are in the business of investing.

Patience & Perseverance: He had huge patience and it played a crucial role in his success. Jhunjhunwala maintained calm when stock market witnessed tumultuous time. He always believed in taking time before making bets. He discouraged everyone from making emotional investments without thorough research as he felt it would lead to losses. His investment in Titan Company reflected power of patience. He stayed invested as Titan that emerged a market leader and helped him earn huge rewards.

Good Judgement: Good judgment comes from experience. Experience comes from bad judgment, said Jhunjhunwala. He always stressed that theoretical knowledge was important but the true genius of investing is experience. Learning from missteps and setbacks is most important.

Deep Research: According to Jhunjhunwala, it is was paramount to carry out deep research before deciding to invest in a particular stock.

Selection of Right Company: Jhunjhunwala believed in choosing the right company as he felt that if the company is strong enough, its stock price will finally rise. He always insisted one should never run behind companies that are popular and refrained from buying stocks that were hot commodity in the share market. He encouraged investors to choose fundamentally strong stocks instead of popular stocks. Jhunjhunwala said maximum investors in share market follow herd mentality and buy stocks based on their popularity.

Grabbing Opportunities: Rakesh Jhunjhunwala always believed that investors should be ready to grab an opportunity. He said that opportunities are created through the various ups and downs in the share market. Jhunjhunwala purchased stocks at a discount while they were undervalued in the market during the 2008 global financial crisis. According to Jhunjhunwala, one can never make money if they are afraid to lose it. Stock market success depends upon your character and temperament instead on any other factors.