‘End of an Era’ – The Big Bull Rakesh Jhunjhunwala Passes Away

Rakesh Jhunjhunwala’s life is a lesson that good health is the ultimate wealth. Because beyond a few crores, it is just a number. This covid lockdown created a new class of home bound traders, who are not doing any physical activity. A combination of sedentary lifestyle plus lack of physical activity plus stress in mind is a deadly combination.

A few years ago for new year once RJ was asked what his wish was. He said, Doctors had advised him movement and to give priority to his health. He admitted he was lazy, and somehow avoiding it plus he loved his drinks in the evening.

Finally it proved to be a fatal combination. Physical activity is a must. Walking in the Sun daily is a must.

62 is definitely no age to die.

RIP RJ

Rakesh Jhunjhunwala Journery in Stock Market

Rakesh Jhunjhunwala did not start with Rs 5,000. The media twisted what he told. He always says that:

a. He had no money. All he had was Rs 5,000 saved from his articleship days.

b. His father wouldn’t give him money and his father forbade him from asking his father’s friends for money.

c. His brother was a practising CA and had a wealthy client who lent him Rs 12.5 Lakhs at 18% p.a. Whatever shares he purchased from her money, he gave it to her as collateral.

d. Another rich “Christian Gentleman” gave him a few lakhs at 18% to 21% p.a.

He invested the entire amount in Tata Power and the dividend he got covered the interest payments. The stock price of Tata Power skyrocketed.

He invested in Tata Tea at Rs 43 and sold off those shares at Rs 143.

For 4 years he did not do any trading. “Badla” as Futures were called then was a popular financing option and he first used it for Sesa Goa shares only.

He bet his entire networth (Rs 2.5 Crores) on the 1989 Madhu Dandavate’s budget and was worth Rs 50 Crores in a month after the budget.

This is no mean feat. Imagine a 25 year old today borrowing ~ Rs 2.5 Crores at 18% p.a. and investing it in stocks. What is the probability of betting your entire networth on a single budget and making 25x returns in a month? Most of the traders and investors in such cases would go bankrupt. What Rakesh Jhunjhunwala did is no mean feat. I doubt if anyone else can even repeat it!

He was the greatest risk manager in the world and then the greatest trader too. The best trader is not one who generates the highest return but one who uses leverage wisely.

So the darkest truth is that he is what every trader / investor wants to be but noone will match his feat. Even Jesse Livermore, touted as the greatest trader ever, went bust many times. Leverage is a two sided sword, most of us cannot handle it.

Inspiring Quotes & Tips by Rakesh Jhunjhunwa Sir

1. If a girl is beautiful a suitor willcome. If a stock is beautiful, a suitor willcome. So Idon’t search for suitors when Ibuy the stock.”
2. I have learnt two things about the press and wives. When they say something – don’t react.
3. Markets are like women always commanding, mysterious, unpredictable and volatile.”
4. Anticipate trend and benefit from it. Traders should go against human nature.
5. Successful investors are opportunistic and optimistic ones.
6. Respect the market. Have an open mind. Know what to stake. Know when to take a loss. Be responsible.
7. Growth comes out of chaos.
8. Market is above individuals. The market is rational. An individual can never be smarter than the market.
9. Maximize profits and minimizelosses.
10. Invest in a business not a company.
11. Emotional investment is a sure way to make loss in stock markets.
12. If in doubt, listen to your heart.”
13. Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it.”
14. Aspire, but never envy.”
15. Be paranoid of success – never take it for granted. Realize success can be temporary and transient.
16. Build a fighting spirit – take the bad with the good.
17. Have some cash in hand so that you can grab the opportunity when it occurs.
18. Blindly following stock picks by big investors is not a wise thing to do.
19. Give your investments time to mature. Be Patient for the World to discover your gems.
20. Never get carried away by aberrations, recognize and respect them but do remember that the market corrects its aberration though it takes time.”
21. Never in my life have I not made an investment because the stock is not popular. In fact I like to make the investment when the stock is not popular.
22. Vadhere vadhare levanu vadhare vadhare beichavanu””-Buy as the market is rising sell as the market is falling.”
23. Like wives markets are always right. With wives you can argue but with markets you can’t.
24. You know , trading always keeps you on your feet, it keeps you alert. That’s one of the reasons why I like to trade.