5 Ways To Invest Like Ace-Investor Rakesh Jhunjhunwala

BANGALORE: “Indian Warren Buffet” or “The bull of the stock market” or “The man with a golden hand”, any guesses on the person called by these names. No need for wild guesses, as it is none other than Rakesh Jhunjhunwala. He is a qualified Chartered Accountant and has chosen trading in stocks as his profession. The reason behind many considering him as the Indian version of Warren Buffet is that he started investing in shares from his young days. He popularity is so high that people even track his portfolio and invest in the same companies he invests in.

Let’s have a look at some of the valuable investment tips given by Rakesh Jhunjhunwala for 2014:

1. Look for value oriented companies: According to Rakesh Jhunjhunwala one should always look for value oriented companies. He always advices his investors to look for companies that would give profits and understand the factors that help in creating profits. In order to spot a good company you should always check whether its capital is raising or not. Secondly if the company is earning profits then, is it using its surpluses in a right manner? Well, for Rakesh Jhunjhunwala he himself has a team who helps him in finding companies which offer value in the long term. If the stock prices of these companies are higher at present, he tends to wait a bit, but finally gets his hands on them. The important thing what he does before buying a stock is that he closely studies its management style, growth potential, competitive nature and many more factors.

2. Buy for long term, it will pay off well: Rakesh Jhunjhunwala invests in the stock market but he is not a short term trader. Instead he invests in stocks for the long term. He believes in holding shares for a very long time because according to him it is one way of becoming a true multi-bagger. All the stocks in his portfolio; especially the ones that have become multibaggers have been held by him for several decades. Some of the stocks he owns have also multiplied his wealth over the years. He had even sold them by 10-20 per cent.

3. Believe in Indian economy: The very first quality every investor should possess is hope and faith in your investments. Ups and downs are common in stock movements but patience is what is required more as it will ultimately make you win. Rakesh Jhunjhunwala is a strong believer of India’s growth story. He repeatedly says the Indian economy will keep growing and asks everyone to be a part of it. According to him, the only way for you to be a part of a growing India is to invest in its stock market. He also advices to believ in market returns on a long-term basis. Investing in debt instruments like fixed deposits or bonds, will not be able to reap multifold returns by any means.

4. Invest on what you know: When it comes to investing Rakesh Jhunjhunwala follows only one strategy ‘Keep it simple’. He will only invest in companies whose business he can understand and would never opt for complex businesses. According to Jhunjhunwala if the investor has no knowledge of exactly what the company is doing very soon or lately he will lose interest in the stock, stop paying attention and lose confidence. So, the best way to invest is to buy stocks in a business that you understand. By doing this, you are aware of where the company is heading to and whether you should stay invested or bail out.

5. Invest again and again irrespective of conditions: Jhunjhuwala said that if it’s done once, it could be a lottery but if it’s done again and again, we call it consistency. This is what he is known for. Irrespective of the conditions he consistently invests in the stock market. According to him the quantum or strategy of investing can differ based on those conditions but he has never backtracked on his belief that stock market will always deliver if you do everything right.

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