Ace investor Rakesh Jhunjhunwala passed away on Sunday morning in Mumbai. He was 62 years old. The Indian billionaire investor is admirably called the “Warren Buffett of India” because he set an exemplary example of how to create wealth from the stock market. The son of an income tax officer, Rakesh Jhunjhunwala started investing in stocks while pursuing his university studies. He started his investment journey with ₹5,000 and today he left this world leaving a wealth of $5.8 billion (according to Forbes data) to his family.
Rakesh Jhunjhunwala is no longer with us, but his investment principles would continue to motivate stock market investors to grow wealth in the stock markets. Here we list 10 investment principles that Rakesh Jhunjhunwala strictly followed throughout his life:
1]Build a fighting spirit: One must show a fighting spirit when the market faces the bones. Rakesh Jhunjhunwala was found suggesting to investors on various platforms that one should “build a fighting spirit – take the bad with the good”. When you are convinced of a company’s business model and its sustainability, there is no need to panic. short-term sentiments, go with your gut and stick to your investment.
2]Respect the market: Rakesh Jhunjhunwala used to say “Respect the market. Keep an open mind. Know what to bet. Know when to take a loss. Be responsible.” The stock market has its own rules and moves based on those rules. You can only earn money when you follow these rules.
3]Be prepared for losses: Big Bull used to say “prepare for losses. Losses are part of life for stock investors.” You can’t be right all the time, so when you’re in the markets to make money, you should be prepared to take losses and behave 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 he has a big role to play. Rakesh Jhunjhunwala used to say that people become shy of investing in stocks after recording losses. His advice to investors was to prepare for the market and continue investing with a rule of thumb of “buy, hold and forget.” I used to advise investors to hold stocks as long as possible.
5]Home work before investment: Rakesh Jhunjhunwala used to say quite often, “Never invest at unreasonable valuations. Never bid for companies that are in the limelight.” He strictly followed this rule and used to advise new age investors to look at stock valuations before making any investment decisions rather than news.
6]Don’t make hasty decisions: Big Bull opined that “hasty decisions always lead to big losses. Take your time before putting money into any stock.” Therefore, an investor should take time before taking any investment decision and then go by one’s own conviction rather than short-term market sentiments.
7]The market will not change for you: Rakesh Jhunjhunwala used to say that “you have to see the world as it is, instead of what you would like it to be.” So, to become a successful stock market investor, it is important to be a part of stock market procedures and navigate 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. Daring has genius, power and magic.” Therefore, the stock market purchase should be made like any other purchase. When you try to buy products at the cheapest possible prices, you should also do the same while buying stocks. they have a habit of buying during the correction.
9]Never time the market: Stock markets are always right and no one can time the market. Big Bull opined that one should enter or exit according to market timing instead of doing it on his own. So, when your investment objective is achieved, you should have profit and when the market doesn’t behave as you wanted, you should also be ready to exit your position.
10]Go against the flow: “Always go against the flow. Buy when others are selling and sell when others are buying,” this famous quote by Rakesh Jhunjhunwala is being used by several investment advisors who suggest buying stocks at a discount and selling when the market is rising.
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