What I learnt from Rakesh Jhunjhunwala

INDIA'S answer to Warren Buffet. The stock market’s ‘big bull’. The pin up boy of the markets: Rakesh Jhunjhunwala.

He made a fortune by investing in the stock market. From an initial amount of Rs 5,000, as it is rumoured, he has made Rs 5,000 crore in just over two decades!

Jhunjhunwala once said humorously, "Markets are like women; always commanding, mysterious, unpredictable and volatile." And yet he lorded them. There is a lot I learnt from his investing quotes, and there's something in it for you too.

-- Invest in a business and not a company.
Jhunjhunwala identified and invested in Pantaloons much before the market discovered it. Today, he is gaining from that investment. That's because he invested in the potential of the underlying business (of organized retail in this case) and it's first mover advantage.

-- Maximise profits and minimise losses.
Cut losses and move on with life. At the same time, hold on to winning stocks till their business has achieved its full potential.

-- Always have an independent opinion. Observe and read relevant information with an open mind.
Jhunjhunwala believes in doing his own research before investing. A good example: he was lapping up the ignored Indian Public Sector (PSU) stocks when the herd was after the IT stocks during the late nineties. He made a fortune investing in PSU stocks, while many lost their shirts during the dot com led market crash in 2000.