Rakesh Jhunjhunwala’s 10 investment principles that made him the Big Bull of Dalal Street

Ace investor Rakesh Jhunjhunwala passed away on Sunday morning in Mumbai. He was 62 years old. The Indian billionaire investor is admirably called ‘Warren Buffett of India’ because he set an exemplary example of how to create wealth from the stock market. Son of an income tax officer, Rakesh Jhunjhunwala started investing in stocks while pursuing his college studies. He began his investment journey with 5,000 and today he has left this world leaving $5.8 billion wealth (according to Forbes data) for his family.

Rakesh Jhunjhunwala is no more with us, but his investment principles would continue to motivate stock market investors to grow wealth from stock markets. Here we list out 10 investment principles that Rakesh Jhunjhunwala strictly followed throughout his life:

1]Build a fighting spirit: One has to show a fighting spirit when the market goes into the grip of bears. Rakesh Jhunjhunwala was found suggesting investors on various platforms that one should “Build a fighting spirit — take the bad with the good.” When you are convinced about the business model of a company and its sustainability, there is no need to get panic from the short term sentiments. go with your conviction and stick to your investment.

2]Respect the market: Rakesh Jhunjhunwala used to say that “respect the market. Have an open mind. Know what to stake. Know when to take a loss. Be responsible.” The stock market has its own rules and it moves on the basis of these rules. One can make money only when these rules are respected.

3]Be ready for losses: Big Bull used to say that “prepare for losses. Losses are part and parcel of stock market investor life.” You can’t be correct all the time and hence when you are in the markets to make money, you should be ready to book losses as well rather behaving like a stubborn investor.

4]Success requires obsession: Big Bull was of the opinion that one can succeed in any field with obsession, but in the stock market it has a big role to play. Rakesh Jhunjhunwala used to say that people become shy of investing in stocks after booking losses. His advice for investors was to prepare themselves for the market and continue investing with a thumb rule of ‘buy, hold and forget.’ He used to advise investors to hold a stock as long as one can.

5]Home work before investment: Rakesh Jhunjhunwala used to say quite often, “never invest at unreasonable valuations. Never run for companies which are in limelight.” He strictly followed this rule and used to advise new age investors to look at the valuations of the stock before making any investment decision instead of news making stocks.

6]Don’t make hasty decisions: Big Bull was of the opinion that “hastily taken decisions always result in heavy losses. Take your time before putting money in any stock.” So, an investor should take time before making any investment decision and then one needs to follow with one’s conviction instead of short term market sentiments.

7]Market won’t change for you: Rakesh Jhunjhunwala used to say that “one should see the world as it is, rather than what you would like it to be.” So, to become a successful stock market investor, it is important to be a part of the stock market proceedings and sail with it rather trying to change it on your own.

8]Be bold: Rakesh Jhunjhunwala strongly believed that “whatever you can do or dream you can, start it. Boldness has genius, power and magic in it.” So, one should take stock market shopping like any other shopping. As you try to buy goods at cheapest possible rates, you should do the same while buying stocks as well. So, one should have a habit of buying during correction.

9]Never time the market: Stock markets are always right and no one can time the market. Big Bull was of the opinion that one should enter or exit on the basis of market timing instead of timing the market on its own. So, when your investment goal is achieved, you should book profit and when the market is not behaving the way you wanted, you should be ready to exit your position as well.

10]Go against the tide: “Always go against the tide. Buy when others are selling and sell when others are buying,” this famous Rakesh Jhunjhunwala quote is being used by various investment advisors suggesting buying of stocks at discounted prices and selling when the market is on the rise.

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