Rakesh Jhunjhunwala
Encyclopedia
Rakesh Jhunjhunwala is an India
n Chartered Accountant
by qualification but an investor
/ trader
by profession. In 2010, Forbes rated him India's 51st and the world's #1062 richest man with wealth of billion. He is a famous equity investor in India and manages his own portfolio as a partner
in his asset management firm, Rare Enterprises. Jhunjhunwala was described in a magazine as the "pin-up boy of the current bull run" and by another as "Pied Piper of Indian bourses". He is tagged by the media as "India's Warren Buffett
".
and plunged into investing as a full time profession soon after completing his education. He started his career with 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. 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,Chintan Pancholi is my guru” said Rakesh Jhunjhunwala.
Jhunjhunwala's portfolio of stocks is tracked religiously. His latest stock portfolio is the subject of many debates and analysis. Like sir 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.
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 BNP Paribas Financial Services Limited, Bilcare Limited, Praj Industries Limited, Provogue India Limited, Concord Biotech Limited, Innovasynth Technologies (I) Limited, Mid Day Multimedia Limited, Nagarjuna Construction Company Limited, Viceroy Hotels Limited & Tops Security Limited.
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 Jhunjhunwala is what makes an invaluable difference to his expected investment returns. According to 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.
Jhunjhunwala has managed to identify numerous 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 Jhunjhunwala are - low institutional holding, under-researched and general pessimism about the stock.
A good time to sell a stock, according to 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.Recently Mr.Jhunjunwala announced that he will spend around 1billion dollar for charity in 2020, But he is not ready to disclose his current value of assets.
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
n Chartered Accountant
Chartered Accountant
Chartered Accountants were the first accountants to form a professional body, initially established in Britain in 1854. The Edinburgh Society of Accountants , the Glasgow Institute of Accountants and Actuaries and the Aberdeen Society of Accountants were each granted a royal charter almost from...
by qualification but an investor
Investor
An investor is a party that makes an investment into one or more categories of assets --- equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc...
/ trader
Stock trader
A stock trader or a stock investor is an individual or firm who buys and sells stocks in the financial markets. Many stock traders will trade bonds as well...
by profession. In 2010, Forbes rated him India's 51st and the world's #1062 richest man with wealth of billion. He is a famous equity investor in India and manages his own portfolio as a partner
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
in his asset management firm, Rare Enterprises. Jhunjhunwala was described in a magazine as the "pin-up boy of the current bull run" and by another as "Pied Piper of Indian bourses". He is tagged by the media as "India's Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
".
Career
Son of an income tax officer, he started dabbling in stocks while in Sydenham CollegeSydenham College
Sydenham College or Sydenham College of Commerce and Economics is the first college of commerce in Asia.It is an institute in Mumbai , affiliated to the University of Bombay, and offering undergraduate degrees in commerce and undergraduate and postgraduate degrees in management...
and plunged into investing as a full time profession soon after completing his education. He started his career with 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. 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
Harshad Mehta
Harshad Shantila Mehta was an Indian stockbroker. He is alleged to have engineered the rise in the BSE stock exchange in 1992. Exploiting several loopholes in the banking system, Mehta and his associates siphoned off funds from inter-bank transactions and bought shares heavily at a premium across...
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,Chintan Pancholi is my guru” said Rakesh Jhunjhunwala.
Jhunjhunwala's portfolio of stocks is tracked religiously. His latest stock portfolio is the subject of many debates and analysis. Like sir Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
, 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.
Jhunjhunwala is the Chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd.
Hungama Digital Media Entertainment Pvt. Ltd.
Hungama Digital Media South Asia's largest mobile & Internet based entertainment company, began its journey as an online promotions agency during the internet boom in 1999. 10 years hence, it is a complete Digital Entertainment, Mobile services and Promo Marketing entity...
and also sits on the Board of Directors of various Indian listed/ unlisted companies like Prime Focus Limited, Geojit BNP Paribas Financial Services Limited, Bilcare Limited, Praj Industries Limited, Provogue India Limited, Concord Biotech Limited, Innovasynth Technologies (I) 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 Jhunjhunwala is what makes an invaluable difference to his expected investment returns. According to 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.
Jhunjhunwala has managed to identify numerous 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 Jhunjhunwala are - low institutional holding, under-researched and general pessimism about the stock.
A good time to sell a stock, according to 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.Recently Mr.Jhunjunwala announced that he will spend around 1billion dollar for charity in 2020, But he is not ready to disclose his current value of assets.