Rakesh Jhunjhunwala Investing Philosophy

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Rakesh Jhunjhunwala is admirably called "Warren Buffett of India" because he excelled at creating wealth through stock markets. Although he’s no longer with us, the principles he taught will still motivate investors to grow wealth in the stock market.

Over the course of decades, Jhunjhunwala dominated the Indian stock market, making intelligent investments to build an empire of stocks valued at over ₹40,000 crore. As India's 36th richest person, he was a multibillionaire.

So, how did he manage to become one of the richest people in the world? What was his investing strategy?

Find out below.

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Who is Rakesh Jhunjhunwala?

Rakesh Jhunjhunwala had a Midas touch when it came to investing. On August 14, 2023, he passed away in Mumbai at the age of 62. Doctors reported that Jhunjhunwala had diabetes and kidney problems.

Many people called Jhunjhunwala India's Warren Buffet. In addition to being a trader, he was also a chartered accountant. According to Forbes, Jhunjhunwala ranked 36th on their Rich List.

As well as serving on the boards of directors for firms such as Viceroy Hotels, Concord Biotech, Provogue India, Geojit Financial Services, he was the chairman of Hungama Media and Aptech.

The son of an income tax officer, Jhunjhunwala started dabbling in stocks in college.

In 1985, he invested $100 in the Bombay Stock Exchange Index, which now trades over 50,000 shares

Titan, a jewelry and watch maker owned by the Tata conglomerate, was the most valuable listed holding in his portfolio at the time of his death. In 2021, Jhunjhunwala's early investments in Star Health and Allied Insurance and Metro Brands paid off.

Despite his reputation as a risk taker, Jhunjhunwala inspired millions of retail investors through his long-term optimism about the Indian economy and markets. Market participants describe Jhunjhunwala as a true investor who held several of his investments for more than a decade.

How Did Rakesh Jhunjhunwala Make His Money?

In 1985, Jhunjhunwala borrowed 5,000 rupees to start his investing career. According to estimates, his net worth totaled $5.8 billion or 46,000 crores of rupees when he passed away.

The first big profit he made was from 5,000 shares of Tata Tea he purchased in 1986. A three-month period was all it took for Jhunjhunwala to triple his money. After that, everything changed.

He made his first crores in the late 1980s through a leveraged bet on iron ore exporter Sesa Goa. After purchasing the stock in the 25-26 rupee range, he sold the holding in tranches until the stock reached 2,200 rupees. Tata Power was also a profitable investment at the time.

Jhunjhunwa continued to invest in Tata group stocks. He gained the most wealth through Tata's Titan Company. His first purchase of the jewelry and watchmaker’s shares was in 2002.

He also owned stocks in Tata Motors, Indian Hotels Company, and Tata Communications. Moreover, his investments in Lupin and CRISIL multiplied several times.

Rakesh Jhunjhunwala’s Net Worth

According to Forbes, at the time of his death, Jhunjhunwala had an estimated net worth of $5.8 billion. Over time, he has steadily increased his net worth, going from $1.3 billion in 2013 to $5.8 billion in 2023. His peak year was 2020 when he made $2.4 billion, bringing his net worth to $4.3 billion in 2021. His growing wealth shows the success and validity of his investing strategies.

Rakesh Jhunjhunwala’s Portfolio

Rakesh Jhunjhunwala and Associates hold 32 stocks with a net worth of over Rs. 33,198.5 crores, according to the latest corporate shareholdings filing in January 2023.

According to the shareholding data filed with the exchanges, these are shares held by Rakesh Jhunjhunwala and Associates.

Escorts Kubota Ltd.

Anant Raj Ltd.

Agro Tech Foods Ltd.

Canara Bank

Crisil Ltd.

Edelweiss Financial Services Ltd.

Fortis Healthcare Ltd.

Indian Hotels Company Ltd.

Jubilant Pharmova Ltd.

Karur Vysya Bank Ltd.

Man Infraconstruction Ltd.

Orient Cement Ltd.

Prozone Intu Properties Ltd.

Rallis India Ltd.

Tata Communications Ltd.

Titan Company Ltd.

Va Tech Wabag Ltd.

Wockhardt Ltd.

Bilcare Ltd.

Dishman Carbogen Amcis Ltd.

Jubilant Ingrevia Ltd.

Metro Brands Ltd.

Aptech Ltd.

Federal Bank Ltd.

Geojit Financial Services Ltd.

Star Health and Allied Insurance Company Ltd.

Nazara Technologies Ltd.

Tata Motors Ltd.

Indiabulls Housing Finance Ltd.

Autoline Industries Ltd.

D B Realty Ltd.

NCC Ltd.

Delta Corp Ltd.

Indiabulls Real Estate Ltd.

National Aluminium Company Ltd.

TV18 Broadcast Ltd.

Firstsource Solutions Ltd.

GMR Infrastructure Ltd.

Lupin Ltd.

Multi Commodity Exchange of India Ltd.

Prakash Industries Ltd.

Steel Authority of India (SAIL) Ltd.

VIP Industries Ltd.

Ion Exchange (India) Ltd.

Heads UP Ventures Ltd.

Prakash Pipes Ltd.

What is Rakesh Jhunjhunwala’s Trading Strategy?

Invest wisely, then wait

In accordance with his philosophy of 'buying right and sitting tight', Jhunjhunwala is sometimes called India's Warren Buffett. The best thing to do is to do your own research, buy the right stock, and then hold on to it until the time is right. Make sure you believe in the company's business. Make smart investments without letting panic drive them.

Keep your stock ideas in perspective and don't get emotional about them

Rakesh Jhunjhunwala was once asked by a reporter whether he (sometimes) gets emotional about his stock ideas as an ace investor. His response was that if he had any emotions, then they were for his children, his wife, and maybe for his girlfriend, but surely not his stocks. He had said, "I would not say there is no emotion when you invest for a long period of time, but they are not emotions you won't be able to part ways with."

In a nutshell, this is Jhunjhunwala's investment philosophy. Make money by investing in stocks (usually long term), but avoid getting emotional about your stock ideas and exit if necessary. Maybe, you are also interested in information about the best Indian stocks to buy for the long-term.

To succeed, you must have patience

Jhunjhunwala didn't become a money magnet overnight. To reach where he is, he had to work hard, do his research, and put his own money on the line. Jhunjhunwala’s portfolio corrected by 25-30% multiple times, but he always used this correction to buy more shares.

When others sell, buy, and vice versa

Jhunjhunwala always believed in going against the tide. According to him, the best time to buy is when others are selling and the best time to sell is when others are buying. Hence, he opposed herd mentality and encouraged investors to invest based on their own judgment.

Never invest at unreasonable valuations

Investors should never invest at unreasonable valuations, according to Jhunjhunwala. Don't go for companies that are in the spotlight. So, whenever you see a stock trading at an unreasonable valuation, stay away from it. It may result in you losing your hard-earned money.

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Rakesh Jhunjhunwala's Advice for Beginners

Stock market investing is a full-time job that requires periodic monitoring, according to Jhunjhunwala. According to Jhunjhunwala, beginners should take their time and make informed decisions before investing. The majority of people don't pay as much attention to buying stocks as they do to buying a house or other regular income plans. Yet, they should.

Long-term Investments

Jhunjhunwala once said it is important to give investments time to mature, as he was a firm believer in long-term investment. If you don't hold your funds or stocks for a long time, picking good ones won’t be sufficient or good enough.

According to him, equity mutual funds are an excellent investment to make. In over seven years, this could allow an average return of 13-14%.

Avoid Emotional Investments

Investing based on emotion is a sure way to lose money in the stock market, Jhunjhunwala argued. Panic buying during a recession or buying too much during a bull market are examples of emotional investments. According to him, selling during a recession will only cost you money and buying too much when the markets are doing well can result in buying too much. The stocks could also be expensive, which could lead to a loss.

Conduct Research

Before investing in mutual funds or stocks, Jhunjhunwala recommended conducting market research. It is important to do proper research before investing your hard-earned money. Investors shouldn’t treat the stock market as a way to make quick money. Investing in the stock market shouldn’t be a gamble. This is why before investing, it’s so important to do extensive research.

Even friendly tips from others shouldn’t be followed blindly. Moreover, he advised never to take stock tips from source. The best way to make an informed decision is to conduct research and analysis. Before investing, you should look into mutual funds if you’re unable to analyze the stock market.

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Never Depend on Historical Data

In Jhunjhunwala's view, you should never make decisions based on data from the past. Understanding the market completely is crucial to making a good decision. You could end up making irrational decisions when relying on historical data. The stock market is sensitive to a variety of factors such as the economy, buying methods, etc., so it's unlikely the past will repeat itself.

History can affect your behavior in a number of ways. One way is that it can make you optimistic about a particular stock. In this way, you may be tempted to stick with non-performing investments and hope for the best in the future. In turn, you’ll invest more in the scheme and work around the clock for no reason.

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Summary

Maverick investor Jhunjhunwala was known for his determination to invest in stocks with high valuations. Stock market trading is the focus of his business, RARE Enterprises. As an expert stock market investor, Jhunjhunwala helped friends and colleagues make the right investments.

His net worth was $5.8 billion, placing him among India's 100 richest people. As a result of his profound knowledge of the the share market and witty one-liners, he became popular among investors. He continues to inspire the lives of many other traders and investors around the world.

FAQs

How did Rakesh Jhunjhunwala become so rich?

Compared to Jhunjhunwala’s other investments, it was Tata's Titan Company that made him the most wealthy. It was in 2002 that he first purchased shares of the jewelry and watchmaker's company. He also owns shares in Tata Motors, Indian Hotels Company, and Tata Communications. Plus, number of stocks, such as Lupin and CRISIL, doubled in value as a result of his investments.

What is Rakesh Jhunjhunwala net worth?

At his time of death, Rakesh Jhunjhunwala's net worth was $5.8 billion.

How did Rakesh Jhunjhunwala get started as an investor?

Having completed his Chartered Accountant degree in 1984, Jhunjhunwala chose to become an investor and trader in the stock market. His first investment in the stock market was just ₹5,000, when the Sensex was around 150 level.

Is Rakesh Jhunjhunwala a CA?

Yes, Rakesh Jhunjhunwala worked as a CA. After graduating from Sydenham College with a BCom degree in 1985, Jhunjhunwala joined the Institute of Chartered Accountants of India (ICAI). Originally a CA, Runjhunwala became an investor instead,

Team that worked on the article

Andrey Mastykin
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Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform. Andrey focuses on educating readers about the potential rewards and risks involved in trading financial markets.

He firmly believes that passive investing is a more suitable strategy for most individuals. Andrey's conservative approach and focus on risk management resonate with many readers, making him a trusted source of financial information.

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Andrey's passion for finance began in 2009, and he has since accumulated extensive experience in trading and investing across various asset classes, including stocks, Forex, and cryptocurrencies.

He has spent over 15 years managing his own capital and working with financial portals, financial institutions, and IT companies, as a financial writer and analyst, further refining his investment expertise.

He is the author of several training courses on investing and trading in financial markets. Led multiple FX/Stocks/Crypto webinar educational presentations. Authored hundreds of articles on the global economy, stock, cryptocurrency, and Forex markets, along with trading strategies. He has also penned hundreds of professional reviews of financial firms.

Throughout his journey, Andrey has been heavily influenced by the works of renowned authors and investors like Benjamin Graham, Ray Dalio, Robert Shiller, and Nassim Taleb.

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Dr. BJ Johnson
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