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Rakesh Jhunhunwala

World’ s Famous Investors

Rakesh Jhunhunwala
Born:
5 July 1960 Mumbai, India

Rakesh Jhunhunwala, Son of an income tax officer, he started dabbling 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. 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 20-25 lakhs. His first major successful bet was iron ore mining company Sesa Goa. He bought 4 lakh shares of Sesa Goa in forward trading, worth Rs 1 crore and sold about 2-2.5 lakh shares at Rs 60-65 and another 1 lakh at Rs 150-175.

Rakesh Jhunhunwala

The prices then went up to Rs 2200 and he sold some shares. But he credits Madhu Dandavate's Union budget of 1990 as the inflection point for his investing career which quintupled his net worth. His privately owned stock trading firm Rare Enterprises, derives its  name from the first two initials  of his name and wife Rekha's name. Under the guidance of Mr Radhakrishna Damani, he made a lot of money shorting stocks at the time of Harshad Mehta scam post 1992.
"My decision to aggressively invest in the asset class of Indian equities at the right time was a very important determinant of my success,"  said  Rakesh  Jhunjhunwala.
Jhunjhunwala's portfolio of stocks is tracked religiously. His latest stock portfolio is the subject of many debates and analysis. Like Warren Buffett, Jhunjhunwala is a long term investor, however he acknowledges that it was 'trading' income which helped him built his initial capital base and continues to remain an active trader as he believes it keeps one alert and always on your feet. Mr. Jhunjhunwala is the Chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd and also sits on the Board of Directors of various Indian listed unlisted companies like Prime Focus Limited, Geojit Financial Services Limited, Bilcare Limited, Praj Industries Limited, Provogue India Limited, Concord Biotech Limited, Innovasynth Technologies Limited, Mid Day Multimedia Limited, Nagarjuna Construction Company Limited, Viceroy Hotels Limited & Tops Security Limited. Investment Philosophy.

Although he claims to put only a minuscule of his networth on the table for trading activity, he has often leveraged his own capital and managed to make a fortune from his calls, more often than not. His stock picking strategy is influenced by the lessons from Mr George Soros's trading strategies and Dr Marc Faber's analysis of economic history. He endorses the thumb rule of 'trend is my best friend'. He is the poster boy of the Indian bull run but admits to have been a bear in  the Harshad Mehta days and believes that a person in the market should be like a chameleon. He calls the markets as temples of capitalism and believes that they are the ultimate arbitrators.

Much like Mr Warren Buffet, he buys into the business model of a company and for judging the longevity and growth potential, he gives top priority to 'competitive ability', 'scalability' and 'management quality' of the enterprise. The 'entrepreneur', according to Mr Jhunjhunwala is what makes an invaluable difference to his expected investment returns. According to Mr Jhunjhunwala, believing in the vision and the beliefs of the entrepreneur and validating the risks that may not be perceived by the entrepreneur are the key success factors for an investor.

Mr Jhunjhunwala has managed to identify umerous multi-baggers in the past decade, notable being Karur Vysya Bank, Praj Industries, Crisil, Titan, Nagarjuna, HOEL and PSUs like BEML and Bharat Electronics, among others. The typical traits to look for while identifying potential multi-baggers, according to Mr Jhunjhunwala are - low institutional holding, under - esearched and general pessimism about the stock. A good time to sell a stock, according to Mr Jhunjhunwala, is not based on any 'price' targets, but when the 'earnings' expectations have peaked or the business model has peaked or the valuations appear ridiculously unreasonable.

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