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In the captivating realm of the stock market, where fortunes are made and lost in the blink of an eye, one name stands out – Rakesh Jhunjhunwala. His journey from a middle-class background to becoming India’s first stock market billionaire is nothing short of awe-inspiring. Born in 1960, Jhunjhunwala embarked on his stock market odyssey after completing his Chartered Accountancy.
Rakesh Jhunjhunwala Biography
The tale of his ascent is marked by strategic investments and a keen understanding of market dynamics. Jhunjhunwala’s initial forays into the market were nothing short of spectacular as he started his journey with a meagre Rs 5000 and slowly started making money. His first milestone was buying 5000 shares of Tata Tea at Rs 43, which surged to Rs 143 in just three months, and investing in Sesa Goa at Rs 25, witnessing a climb to Rs 65 in four months, showcased his early acumen.
However, the turning point arrived with the 1989 budget where Madhu Dandavate was the finance minister who served in the cabinet of V.P.Singh and he was always in awe of Mr V.P. Singh. Rakesh Jhunjhunwala, with an uncanny sense of market sentiment, bet all he had on the positive outcome of the budget. His Rs 3 crores swelled to Rs 20 crores on the budget day itself. His philosophy encapsulates both audacity and resilience – “I have lesser will than people think but far, far, far more than I need.”
Yet, this journey was far from smooth. Jhunjhunwala encountered setbacks, notably in a share of A2Z, where he lost over Rs 150 crores. Nevertheless, he embraces mistakes, stating, “Never be afraid to make a mistake, only make one you can afford to, so that you may live to make another one.”
In his illustrious 37-year investment career, Jhunjhunwala earned the moniker “Big Bull” and drew comparisons to Warren Buffett. His privately-owned firm, Rare Enterprises, derived its name from the initials of his and his wife Rekha’s names, both avid stock market investors. It must be really intriguing to know how he did it.
Well, his success story is a culmination of the following five tenets:
The Five Pillars of Jhunjhunwala’s Success Story
1. Profit Uptrend:
- Multibagger stocks exhibit a consistent uptrend in profits over the years.
- Analyze a company’s earnings per share (EPS) growth for a track record of profitability.
2. Good Valuation:
- Pay attention to a stock’s valuation, ensuring it is not overpriced.
- Stocks with reasonable valuations relative to earnings potential have a better chance of becoming multibaggers.
3. Future Information:
- Anticipate future trends and developments.
- Stay informed about a company’s long-term goals, expansion plans, and market trends.
4. High Net Worth Individual (HNI) Buying:
- Observe the interest of seasoned investors.
- Increased stakes by High Net Worth Individuals may indicate hidden potential.
5. Great Sector:
- Invest in stocks with huge growth potential.
- Evaluate the overall health and potential of the sector in which a company operates.
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