Thought For The Day

" People who own more than two Mutual Funds are over - Diversified "
(Great Investment Guru) JOHN NEFF

 

JOHN NEFF :



Investment Style
John Neff did not describe himself as either a value or contrarian investor, preferring instead to characterize his investing approach to one of buying "good companies, in good industries, at low price-to-earnings prices." Despite his value-contrarian investor disclaimer, Neff's investment management career shows a considerable amount of this type of investing strategy.

Neff practiced portfolio concentration over diversification. He pursued stocks of all sizes – large, small, and medium – as long as they evidenced low P/E ratios, which he described as "low P/E investing." Two of Neff's favorite investing tactics were to buy on bad news after a stock had taken a substantial plunge and to take "indirect paths" to buying in to popular industries. This involved, for example, buying manufacturers of drilling pipe that sold to the "hot stock" (too pricey for Neff) oil service companies.



He preached against participating in "adrenaline markets" (momentum driven) and preferred face-to-face meetings with a company's management to assess its integrity and effectiveness. For most individual investors, this type of contact is not a realistic possibility; however, using Neff's rigorous fundamental analysis techniques as applied to a company's financials will turn up enough management performance indicators to compensate for the inability to directly interact with a company's managers. (For more insight, see Evaluating A Company's Management and Putting Management Under The Microscope.)

SOURCE FROM :
Read more: The Greatest Investors: John Neff | Investopedia https://www.investopedia.com/university/greatest/johnneff.asp#ixzz3mjm8Axq6

 

It's not always easy to do what's not popular, but that's where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized."

JOHN NEFF

 

"I've never bought a stock unless, in my view, it was on sale."
JOHN NEFF

 

Successful stocks don't tell you when to sell. When you feel like bragging, it's probably time to sell."
JOHN NEFF

 

5 Secretes that make Rakesh Jhunjhunwala Successful Investor



Big Bull Badshah of Dalal Street Rakesh Jhunjhunwala needs no introduction he is known as stock guru and warren buffet of India. By profession Rakesh Jhunjhunwala is a qualified Chartered accountant. He started his investment in stock market when BSE Sensex was at 150 in 1985. He started his investment with 5000 Rs/- and now his portfolio worth is 5119 Cr. He manages his own portfolio as a partner in his asset management firm, Rare Enterprises. Jhunjhunwala’s portfolio of stocks is tracked religiously by many followers. His latest stock portfolio is given here.

Rakesh jhunjhunwala is indeed successful stock market investor. So question arise that what are things/qualities that makes Rakesh Jhunjhunwala successful & billionaire Investor?

India has many so-called stock experts, trader stock analysts but none of the trader or stock analyst is as successful as Rakesh Jhunjhunwala. So with close observation I could locate following 5 secretes that make Rakesh Jhunjhunwala successful billionaire Investor.

1. Capital:

To make money you need money, this may not be true in many cases but in case of stock market you need a lot of capital to become zero to hero or to become successful billionaire Investor.

But another big thing is capital can be made also. This is what rakesh jhunjhunwala has done. How he has gone with a starting capital of Rs 5,000 to a net worth of a few thousand crore rupees is now the stuff of urban legend.

Rakesh Jhunjhunwala said in one of his interview “I had no capital when I came to the markets, and no father gifts and no father-in-law gifts. So I had to earn the capital to invest. How do you invest if you don’t have the capital? And I got the capital by doing future trading.”

In 1985 when Rakesh Jhunjhunwala has started 5,000 Rs/- was said to be good capital for investment today you at least required 2-3 Lakh as initial capital to start investment in stock market.

2. Knowledge:

In today’s world for every business or job you need relevant experience and skills. Without knowledge and experience one cannot get good job or cannot establish good business. Same is true in case of investment & stock market.

You require specific knowledge and skill set to become successful like Rakesh Jhunjhunwala.

Rakesh Jhunjhunwala said “Markets are about money, but markets are also about knowledge. Markets are also about egos; markets are also about the satisfaction of having been proved right. Especially, when that right is from an original thought and not from a guided source or following somebody.”

You need to do lot of research, a lot of data gathering and a lot of knowledge accumulation before making investment in stock market.

3. Right time Right Decision:

For every investment you make time of investment matters, especially in stock market, you have to be selective and have to pick right stock at right time. Rakesh Jhunjhunwala is master of that, he pick correct stock at correct time.

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 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 price rose to Rs 2200 and he sold some shares.

So right from beginning he has quality to select right stock and to click correct deal at correct time. This is important quality to become successful in stock market.

4. Patience:

Controlling emotion and keeping patience is extremely important in stock market. Stock market moves upward as well as downwards. During down trend or during market crash one should maintain patience. In other word one should have faith in investment made in stocks.

Jhunjhunwala’s stocks fell by up to 30% in December 2011. But he has quality to keep patience and that patience pays its fruit. He recovered his losses in February 2012. This year his portfolio has given around 35% returns.

5. Vision:

I believe that if a person can dream up something he/she can do it. It may take time and effort and persistence but it’s not impossible. Personally I believe dreams are worth fighting for because they are a representation of out truest self and out innate abilities.

In word of Industrialist Dhirubhai Ambani “Only when you dream it you can do it.” Or “For those who dare to dream, there is a whole world to win!”

According to me Rakesh Jhunjhunwala is visionary. He started with capital of Rs 5,000 in 1985 and now in 2013 he is sitting on portfolio worth 5119 Cr. To start with Rs 5,000 and to reach to Rs 5000 Cr in stock market is indomitable. He sees Dreams and has capability to turn dream in to reality.

To be successful in stock market like Rakesh Jhunjhunwala one must have vision.

There could be many other factors responsible for success for Rakesh Jhunjhunwala but preliminary I could find above 5 things which makes him successful in stock market.

Investment Philosophy of Rakesh Jhunjhunwala:

Rakesh Jhnunjhunwala stock picking strategy is influenced by George Soros trading strategies and Marc Faber’s analysis of economic history. He endorses the rule, “the trend is your friend.”

His investment philosophy says “Buy right and hold tight”.

He admits to having been a bear in the Harshad Mehta days and believes that investors should be like chameleons. He has said that the markets are temples of capitalism and believes that they are the ultimate arbiters.

He claims to base his trades, in part, on the business model of a company, its growth potential, and its potential for longevity. He factors in heavily the competitive ability, scalability and management quality of the enterprise. The entrepreneur, according to Jhunjhunwala, makes an invaluable difference to his expected investment returns. According to Jhunjhunwala, believing in the vision and the beliefs of the entrepreneur and evaluating risks that may not be perceived by the entrepreneur are key success factors for a trader.

At end I would like to share with you famous quote of Evan Esar on Success

“Success is the good fortune that comes from aspiration, desperation, perspiration and inspiration.”

Source : https://moneyexcel.com/3516/5-secretes-that-make-rakesh-jhunjhunwala-successful-investor