“Rakesh Jhunjhunwala could trade and had a trader’s mindset; he could be an investor and had an investor’s mindset and he could get a phone call from a private equity investor and handle something. So he excelled in all three areas. Though he was best known as an investor, he proudly said he was a trader because he made his capital through trading,” says Atul Suri, CEO, Marathon Trends – PMS

What is your short-term market view, what is your medium term market view and what is your long-term market view?
Short-term market view is that we are part of a global correction due to the hawkishness of the Fed. I do not know where it is going to stop 16,800 on the Nifty or 16,500. But that is a very short term view.

In the medium term, I see the market at 21,500 which I think would be more like a year kind of view and if we are able to follow it up with earnings and if the thesis of India secular move and the globe remains more or less okay, I think that we could just rip it apart.

As Smart TalkRakesh Jhunjhunwala used to say: “People say apna time aayega, apan time aa gaya hai (people say our time will come; it has already come). All respect to his vision. When somebody passes away, you tend to appreciate him a lot more. I am noe really able to appreciate his prediction, his style, his thought more.

What made him such a great trader?
I think that he had 3X our brain power. He could be sitting with you, looking at the screen, probably giving orders and yet talking about investments so he could trade, a trader’s mindset; he could be an investor, investor’s mindset and yet he could get a phone call from a private equity investor and handle something. So he excelled in three areas. He proudly said he was a trader because he made his capital through trading. How did he fund his investment? Through trading. He was a very successful investor that is what people know about but the fact is that the wealth that he has created in the last few years has been actually monetising his PE plays.

In the secondary market, he did not have any of those 100X kind of plays in the last few years. In fact, it was monetising the PE plays which really gave him the 100X. I think that is the reason for his wealth creation.

We know Rakesh Jhunjhunwala was a great capital allocator, the great investor, the man who literally saw tomorrow. What made him a great trader? Was he one of those disciplined traders who would go with the trend, respect stop losses or was trading for him always this gut call based on human behaviour?
I think he managed risk very well. Everyone has gut feelings; some are right, some are wrong. He also had his fair share of failures…

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In trading, I am talking about Rakesh Jhunjhunwala the trader.
Yes in trading but the beauty was his risk management. For someone with his wealth and his size, it is very easy to get arrogant. It often happens with retail investors that very often trading becomes delivery and long term. Rakesh ji never let that happen. He had great ability to manage risk, I have seen him exit losing positions, get back the next day, go through that immense amount of pain because he believed in risk management. The problem is that when you become very rich and you have a lot of liquidity, you can let that risk management go because you can afford it. He never let that happened till the last moment.

Define a trade which you would say is a classic trade which all traders should follow as an example, where he got it wrong.
Let me tell you something where he got it right very recently. That will be a better example. It is the case of Tata Steel. There was the Covid pandemic and he could see the start of a commodity bull market. Nobody knew how big it would be. So he got into NSE -1.21 % at a very early stage. It was more like a trade, it is more a study on international commodity prices which we would share with him, which we would see charts on, etc.

But as the trend progressed, he could see the performance of Tata Steel as a company, he could understand the strengths. He went into the balance sheets, P&Ls, spoke to people and actually doubled up his position. I call it a part of risk management and as the trend continued, he was convinced that this is not just a large trade; this is a trend and he was able to take delivery or convert that into an investment.

A lot of Rakesh ji’s investments were not like that. When he got into NSE -1.67 %, it was struggling but he built fantastic pyramids and when he got convinced that a mega trend was happening, he converted that into an investment.

If I think about it, there are lots of stocks he got wrong.
Absolutely.

But he had the ability to withstand the pain. A stock like Titan in his holding period of 25 years must have fallen more than 50% three or four times.
Yes.

While the world was falling apart, he said look I am going to stick to it. So his ability to buy and hold worked. Why don’t we have too many successful traders? What do you think they are doing wrong?
I personally think it is the discipline part of it…

Which is stop loss…
Yes, it cannot be taught. We can see it on paper. I can tell you but the fact is when you get on an emotional journey, it is such a rollercoaster that most people cannot… The failure is not at the intellectual quotient, the failure is at the emotion quotient. The failure is not that you do not have money, the fact is that we fail to actually handle it.

Whether he had Rs 100 in his pocket or Rs 100 crore, for Jhunjhunwala, the discipline with which he managed his positions was phenomenal. I used to wonder that someone like him could take losses, he had that ability but the ruthlessness with which he sold and exited his positions was fantastic. That kept him afloat. That is why most successful traders will do well in a phase but when the phase changes, all these rules go haywire and they are unable to recover and stand. He was able to do it cycle after cycle, for 30 years. Risk management kept him afloat.

When you challenge the ordinary you become extraordinary and that is Rakesh Jhunjhunwala for you.
Absolutely.

He has told the world how to convert Rs 5,000 into Rs 40-50,000 crore (his wealth).
Absolutely, I mean the numbers are ridiculous, the CAGR is ridiculous….

All I can say is that we all will miss him but nobody will forget him.
The footprint is so massive. All kinds of people talk about him, you realise that there are so many facets to his personality and it is so fascinating, I feel so privileged to have spent so much time with him and as I said that I am realising this more so after when he is gone because then you realise oh! my god it was such a big footprint.