Rakesh Jhunjhunwala never looks disturbed. That’s the hallmark of a great investor. And nobody can dispute that Rakesh Jhunjhunwala is a great investor – like Warren Buffett – riding the crest of the waves with the troughs – with a gentle smile always playing on his lips.
However, this great investor let his guard down on CNBC a few weeks ago and admitted ruefully, that the year 2011 had been the worst year for him all his life.
Rakesh Jhunjhunwala had good reason for wanting to see the back of 2011. First his stock portfolio took a savage drubbing from the bears and he lost a big chunk of his wealth. Second, his favourite stocks – those that he had publicly recommended his devotees to purchase – let him down very badly and left him with a very sorry face before his devotees.
First, lets take a look at Rakesh Jhunjhunwala’s portfolio. When we last checked in August 2011, his portfolio was deep in the red (see Rakesh Jhunjhunwala Stock Portfolio Suffers Loss Of Rs. 316 crores). Since then we have been petrified to check the portfolio because things have only gone from bad to worse.
What must have hurt the Oracle of Mumbai more than the (non) performance of his stock portfolio must be the fact that the stocks he publicly recommended his disciples to buy have let him down very badly.
Bilcare is on top of the rogues gallery. In 2007 Rakesh Jhunjhunwala had exuded enormous confidence about Bilcare, calling it a stock which would give “mind boggling returns” (see Rakesh Jhunjhunwala’s Flop Stock Picks). At that time, Bilcare was quoting at Rs. 600 and has been steadily losing value over the years. On Monday, 14th November 2011, Rakesh Jhunjhunwala must have been shocked out of his wits when Bilcare plummeted an incredible 20%, tripping the circuit filter, and rested at Rs. 236.
Visaka Industries is the other stock, the less said about, the better. When he bought into Visaka Industries at Rs. 151, there was an enormous wave of joy amongst his legion of followers that a new multibagger stock had been spotted by their master (see Rakesh Jhunjhunwala is buying Visaka Industries!!) Sadly, Visaka belied all those expectations and sank like a stone.
CRISIL’s rescue act, saying that Visaka had “strong upside“, brought some cheer to Visaka’s beleagured investors (Rakesh Jhunjhunwala’s Stock Pick Visaka Industries Endorsed By CRISIL) but even that was short-lived. Visaka kept its wayward ways and continued to sink.
On Monday, 14th November 2011, Visaka added to Rakesh Jhunjhunwala’s depression levels by slumping 10% and tripping the lower circuit, resting at Rs. 78.
Geometric is one stock that the master must have regretted ever knowing. Rakesh Jhunjhunwala, usually very reticent about stocks, went overboard with Geometric, calling it “the biggest element of enterprise software” (see Rakesh Jhunjhunwala’s Flop Stock Picks). Well, not much can be said about Geometric except that it is probably the only stock in the world to have been publicly shamed by being called a “disaster” by Rakesh Jhunjhunwala.
However, Rakesh Jhunjhunwala did not become a billionaire by wallowing in depression or crying about his lost stocks. Instead, he knows that there is a time and place when one should cut one’s losses and move ahead. Rakesh Jhunjhunwala can be ruthless if the stocks do not perform (see Rakesh Jhunjhunwala’s Portfolio Strategy: Water Flowers; Cut Weeds). So, it shouldn’t come as a surprise if Bilcare’s steep fall on Monday was the result of the master selling the shares of Bilcare!
Rakesh Jhunjhunwala’s disciples must not forget the clarion call given by the great investor to slowly and steadily accumulate quality stocks whilst the great depression lasts (see Rakesh Jhunjhunwala’s Stock Market Predictions Come True). This is the only way to get seriously rich says Rakesh Jhunjhunwala!