What Rakesh Jhunjhunwala said about investing through mutual funds

Rakesh Jhunjhunwala, the Indian billionaire investor who is admirably called the ‘Warren Buffett of India’ because he set an exemplary example of how to create wealth from the stock market died on August 14 in Mumbai.

A qualified CA and the son of an Income Tax officer, Jhunjhunwala had entered the stock market in 1985 when the Sensex was at 150 points with only 5000. The journey that began with 5,000 and has left this world today leaving a wealth of $5.8 billion (according to Forbes data) to his family.

He is no longer with us, but his investment principles would continue to motivate stock market investors to grow wealth in the stock markets.

In an interview with Times Network India Economic Conclave 2021 held in March, Jhunjhunwala spoke about how investing through mutual fund or fund managers is a mature attitude.

Read also: Rakesh Jhunjhunwala’s 10 investment principles that made him the Big Bull of Dalal Street

When asked about his advice to Robinhood investors, who were born in the pandemic crisis and came to the stock market believing that the stock market is the place for instant gratification.

To this, Rakesh Jhunjhunwala said, “First of all, I would like to tell you, don’t forget that this is not a racetrack. And all this volume of fluctuation that reaches the limit of the games that would come to America… I think it can be very damaging to investors. They will lose money on this.”

Read also: Rakesh Jhunjhunwala started his journey with a fair capital 5000; everything you need to know about India’s Warren Buffet

He further added, “If you’re getting a 6 percent return on debt, your target should have gotten 15-24 percent on equity.” He further advised investors not to engage in any kind of day play. He said, “Don’t get involved in this whole gambling game where stocks go up 40 to 50 percent every day.”

The mature attitude is to invest safely, give your money to experience people to invest through mutual funds to fund managers and expect a reasonable return, he said.

Read also: Rakesh Jhunjhunwala’s journey, share holdings and investment advice

“You know I used to have a drink at Geoffrey’s and a pretty girl came up and asked me what do you buy and what returns do you get. I tell her about stocks and the returns will double in 3-4 years. The girls just said,” he said. “I give him the address of Mahalaxmi Racecourse.”

“Everything in life is about maturity and don’t keep raising your stakes,” he added.

Read also: Rakesh Jhunjhunwala’s latest stock bet? The fee increases by 43% in two sessions

Rakesh Jhunjhunwala ruled the Indian stock market for decades, making smart investment decisions to build an empire of holdings worth more. 40,000 million. He was the 36th richest person in India.

His first big profit was seen in 0.5 million in 1986 when he bought 5,000 shares of Tata Tea a 43 and in 3 months it was trading at 143. He made a profit of more than 3 times by selling the stocks of Tata Tea. There was no looking back then.

He never gave up his love for Tata companies and their shares, he held 1 percent each in Tata Motors with shares worth 1.731 crore and Tata Communications valued. 336 million.

Between the years 1986 and 1989, he did 20-25 lakhs from his investment in Dalal Street.

As of June 2022, with a shareholding of 17 percent, Rakesh Jhunjhunwala owned 100.7 million shares of Star Health and Allied Insurance Company, worth a whopping amount. 7017 million.

His other major holdings include 2255 million to the Metro footwear brand, 1285 crore to Crisil and 853 million in Fortis.

The 62-year-old’s entry into the capital-intensive sector raised eyebrows earlier this year, with many pointing to the complicated history of billionaire-backed airlines in India, as well as the economic outlook discouraging worlds. Jhunjhunwala had invested $35 million for an estimated 40% stake in the new airline. “A lot of people ask why I started an airline. Instead of answering them, I say, I’m prepared for failure,” the billionaire had said.

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About the Author: Chaz Cutler

My name is Chasity. I love to follow the stock market and financial news!