Rakesh Jhunjhunwala is an Indian Warren Buffet and investment maestro whose calculations for Indian stock market is totally different than your current one.
Being a self-made Billionaire, Rakesh Jhunjhunwala possesses $2.9 Billion (July 2017) and ranks 53rd richest person in India. Rakesh Jhunjhunwala is a Chartered Accountant by qualification and a trader by profession.
Rakesh Jhunjhunwala started investing in stock markets since he was in college. At that time BSE was at 150 points. Yes! Now imagine from 150 to 32,000 (September 2017) points, how one investor would have become multi-bagger. This year, market has given 20% to each investor and still, 3 months left.
Here are the golden rules of Rakesh Jhunjhunwala for stock market people:
1) Don’t give reactions to Press & Wives.
Media & Newspapers don’t go accurately when it comes to business news. By judging on their writings, investors cannot take up-to-mark decision for selecting stock. He/she may end up with loss.
2) Go against human nature & not with it.
Simple, when everyone is buying, keep calm. When everyone is selling, buy it! If you want to take full profit potential of your investment, take this seriously. Ask yourself everyday that why are you buying this stock, everyday!
3) Invest in a business, not a company.
You may not find the clear difference between these 2 but when you see the trend, you will find many firms that are in saturation mode. By analysing the industry of business, invest in right trend. Studying nature of business is most important factor.
4) The right time of investment is when stock is NOT popular!
If your stock is popular, it may give you return (somewhat percent) but not profit. Know the real profit of market by starting from 0. From 80 to 100, everyone grabbed 20. But from 0 to 100, very fewer guys. 0 to 100 teaches many things in life than that of 80.
5) If opportunity knocks your door, open it immediately.
‘Waiting too much for right time, is the right time to end very soon.’ Without thinking much & deep research, invest it and grab the opportunity. But, keep in mind that this doesn’t actually mean that buying a bread without looking on its expiry date.
6) Learn to lose. Don’t take your mistakes too seriously.
Without losing money, there is no investor on this planet who became rich. Take Warren Buffet or Rakesh Khunjhunwala himself. If you get chance to meet them, ask them the first question for how much they lost. It is simple, if they didn’t face lost, they would surpass Bill Gates and majority people in world could have become full-time investors.
7) Go against waves. Sell when others are buying.
When market is in recovery mode, buy your favourite stock, in your budget. Through this, you will get more quantity of stock than others. When market retains, you will have good numbers than those who bought from trend.
8) Emotional investment is a sure-shot to make a loss.
If you feel that this is my father’s favourite company and I should make him happy (even if he is no more), then don’t expect your stock to perform well. Be ready for loss. As discussed earlier, focus on business and its industry. It will help you to judge good future.
9) Blindly following big investors or copy trade is not advisable, at all…
Big investors are not always long-term investor. And if market hinted for his/her exit from stock or near to sell, you will face huge loss than his/her. Copy trade is neither good nor bad. It should be used in a smart way.
10) Be patient rather than to become patient.
Even trees take time to bear a fruit, we are still human. Markets will take time give you a good return. In real words, you can feel profit after long time.
11) Have a backup plan to grab another opportunity.
Some spare cash will help you in many ways. It will recover your overall profit by making good profit. So that you can give properly to time to non-performing or saturated stock. Investing all the money in single one is the biggest mistake one can ever make in stock market.