Stock selection strategies
by Rakesh Jhunjhunwala
Photo from money control website
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Rakesh Jhunjhunwala was called the Big Bull or Warren Buffet of Indian stock market.
How did Rakesh Jhunjhunwala start?
Before understanding the 7 stock selection strategies by Rakesh Jhunjhunwala ,we should first try to understand his investing journey. He started his journey with mere Rs 5000 and reached to Rs 40000 Crore. He had a deep faith in Indian market and growth of India which made him a successful long term investor.
Rakesh Jhunjhunwala had a deep understanding in businesses of India. He was extremely optimistic about India’s future growth.
Rakesh Jhunjhunwala was an exceptional combination of long term investor and short term astute trader.
Having deep investing traits he could survive in Indian stock market for 40 years. He started his journey in 1985 when SENSEX was 150. Now SENSEX has multiplied approx 400 X to 60000.
Rakesh Jhunjhunwala’s portfolio
At present Rakesh Jhunjhunwala had share holding of 32 stocks with a net worth of more than Rs.40000 crore.
The main Holdings are Titan, Star Health and Metro brands. Other holdings also include Indian Hotels, Nazara Technologies, Jubiliant Ingrevia, Tata communication, Escorts etc.
Ref: from porfolio of RJ at Moneycontrol
Rakesh Jhunjhunwala’s Akasa Airline
Rakesh Jhunjhunwala recently on August 7’2022 started Akasa airline with 40 per cent stake in the company .He inaugurated airline’s first flight between Mumbai and Ahmedabad .
On the day he told that the airline conceived and born in only 12 months record time.
This move also confirmed that he was never hesitant of taking on courageous steps. On this airline lauch ,he was questioned by several investors that why he took decision to start an airline duing the bear market.
Jhunjhunwala stood with his decision and he was prepared for the loss also .This stock selection strategies by Rakesh Jhunjhunwala was admired by investor community .
Tribute to Rakesh Jhunjhunwala
Many retail as well as big institutional investors have deep faith in Rakesh Jhunjhunwala’s investing strategies. All the market is giving the tributes on his demise. His 40 years stock market journey inspired lot of retail investors.
Our honorable prime minister and other politicians also tweeted and sent their deep condolences .
Stock selection strategies by Rakesh Jhunjhunwala
Some of the strategies he acquired during his investing journey are as follows :
1. Patience is the key in investing
Jhunjhunwala showed patience in his investing journey. He did not become a billionaire overnight. It took years of learning and research in stock market to reach this position.
His portfolio corrected 20-30% multiple times but he always used this as an opportunity to buy more. He added more money in the markets as per his high conviction and India’s growth story .
2. Well research stocks and hold for long term.
Rakesh Jhunjhunwala’s investing strategy was that he first used to do deep research about the stock in an out and then once he purchased the stock.
His strategy was to sit tight for long term without selling the stock. Once he picked the right stock, he showed deep faith in company and its business. He didn’t let panic drive is investment decisions during tough times.
3. Finding companies with competitive advantage
Competitive advantage or MOAT is the ability of any company to outperform its competitors in all type of business circumstances.
Rakesh Jhunjhunwala had the ability to find the companies with competitive advantage like low cost power, new technology, high skilled manpower, geographic strategic location or any entry barrier in the business.
By this competitive advantage the company can leverage iat business over its competitors.
4. Selection of scalable business
Rakesh Jhunjhunwala could select the business on the basis of its scalability for long term. He has been holding Titan for 20 years as he understood that business is scalable for long period of time. If the business is scaling in sales and earnings ,he used to ride the journey .
5. Investing in business of company and not share price
He was believer of business analysis. He always told that every stock has the business performed by the company.
The person should see himself self as a share holder and business partner of the company and not just seeing the price of the share.
6. Going against the flow of Mr Market
Rakesh Jhunjhunwala believed that you as an investor should goagainst the herd mentality. Invester should have courage to buy when others in market are selling. He should sell when others are buying. He was famous for investing heavily in bear market scenario .
7.Avoid emotional investment
He was firm believer that an investor should not attach himself or herself to the stock. The investor should think rationally and sell the stock without emotion once exit signal is triggered.
He advised the retail investor to have clear selling strategy of the stock without any mental bias. He once told that investor should be emotional to his family not for the stock.
Rakesh Jhunjhunwala’s investments and his portfolio were followed by many retail investors and many institutions. Stock selection strategies by Rakesh Jhunjhunwala were unique in stock market from which lot of investors got inspired.
Despite being big bull of Indian stock market ,he always admitted his mistakes and rema. He told that he paid a price and booked losses for picking the wrong companies.
It was his curiosity to learn more in investing and in life which made him a successful investor and big bull of India.
He was holding TITAN for twenty years shows his deep patience and understanding of the business which we as retail investors face the problems .