How to invest in stock markets and be successful like Rakesh Jhunjhunwala?
Rakesh Jhunjhunwala is one of the most famous stock investors in India, if not the world. He has often been dubbed as the Warren Buffett of India – a comparison, as it appears, he is not particularly fond of. His story of making Rs 8,000 Crores from just Rs 5,000 is definitely inspiring and intriguing, to say the least. Mr Jhunjhunwala’s success has prompted many investors, amateur and experienced alike, to have a go at the markets for the ultimate rewards of fame, glory, and wealth. How to invest in stock markets and be successful like Rakesh Jhunjhunwala? In this article, we would give certain tips on how to use be successful like Rakesh Jhunjhunwala.
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How to invest in stock markets and be successful like Rakesh Jhunjhunwala?
What many people do not realize is that while investing in stock markets is easy, it takes skill, patience, common sense, and to a certain extent, luck, to earn a sizeable return from your investment. In the thrill of trying to make a profit in the markets, people end up making blunders which cost them dearly. It is important to realize that in order to invest in the markets like Rakesh Jhunjhunwala and be successful at it, there are a few things that you need to keep in mind:
Tip#1 – Accept that you will make mistakes, and it is absolutely fine to do so
Rakesh Jhunjhunwala has always believed in the importance of failures. In fact, it was his mistakes that made him a better investor. When you make a mistake, you learn from it and when you do, you make sure that you do not repeat it again. This will hold good for anything you ever decide to do in your life. Every mistake teaches us something new and same is the case with stock markets as well. Every time you make a mistake in stock markets while trading or investing, make it a point to learn from it. This is the first lesson for you to learn when it comes to dealing with securities.
You will never forget the first time you lose money because of a silly gaffe you made. However, instead of putting you down, it should only motivate you further to learn more about the intricacies of stock markets. You may have lost Rs.10, 000 in a matter of minutes, but the lessons learned from it are going to be priceless in your long journey to become a successful investor like RK.
Tip#2 – As far as possible, invest for long-term
There is a fundamental difference between trading and investing, and this sentence summarizes it perfectly: If you are looking to make money, you should opt for trading, but if you are looking to grow that money, you should invest. All the big shots who have made money in the markets have given preference to investment over trading. This is because they know that trading is a demanding profession – it requires a great deal of time and effort. Furthermore, in order to become a successful trader, you need to carefully monitor the movements in the markets to find the ‘right time’ to enter and exit. You miss the opportunity and you may very well lose your money. In simpler terms, trading is a risky proposition.
On the other hand, if you are investing in a long-term, you need not concern yourself with stock price movements and other variations on a daily basis. Instead, your focus should be on the financial performance of the company. The philosophy here is that if a business does well, its performance will be reflected in the stock price. This is also known as value investing and this is what Rakesh Jhunjhunwala did – he made an early bet on companies like Tata Tea and Titan believing in their potential. Its end result is for us to be seen today.
Tip#3 – Read, learn, and share your knowledge
There are a plethora of books on stock markets, which have enabled thousands of investors to make a profit. The Intelligent Investor was written more than 50 years ago and it is still considered to be the Bible of investing. This book is a good place to start for anyone who is looking to enter the intriguing world of stock markets. You can follow this with more literature, often preferred by the likes of Buffett and others. Some of the popular books are A Random Walk Down Wall Street, Learn to Earn, et cetera. In your quest, you will also learn about the power of compounding and realize why it is better to invest for a longer period.
You may also consider taking online courses in the finance domain to understand basic concepts such as fundamental analysis of a company’s balance sheet, profit & loss report, et cetera. This knowledge will help you analyze a company’s stock better and in turn, enable you to make an informed decision. Additionally, you can join online forums to interact with fellow investors and share insights. You can also look at sites like Bankbazaar.com, which give a fundamental analysis of the companies listed on the markets. At the end of the day, the decision for you to invest in a particular security should be yours alone and more importantly, you should be confident with it.
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Final Thoughts
Investors like Rakesh Jhunjhunwala did not become rich overnight. They believed in the potential of their portfolio and waited patiently for their stocks to grow. They also re-assessed their investments on a timely basis and made changes to their portfolios accordingly. As an investor who is just starting out, you should definitely pay heed to the aforementioned points and also remember to be patient. There should be a concrete reason for you to invest in a stock driven by logic and analysis, rather than hype and speculation.
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Author Bio
This is a guest post from Pooja Joshi. She is a blogger who writes articles on the topics related to finance and investments.
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The story of Mr. Rakesh Jhunjhunwala is very inspiring. But one should not rush yourself to become a great investor or something. Be patient and focus on learning more things and investing in the right stock. In addition to these points, one should also keep an eye on current social trends and situations. This can reflect which company has a chance of growth in the near future. Also, stocks are high-risk high return investments. Look for a good and trusted investment agency. Invest through them so that you will start safely. Invest small amounts on your own too. This will increase your knowledge and give you confidence.
Dear Sureshji,
You have helped and guided me a lot in mutual funds. Today I would like your advice on stocks. I have bought 2000 shares of Yes Bank at 55 rs thinking that it would be good value buying. would also like to hold these for long term. Also looking to add some more when the prices touches 40-35. Am I on right track with this stock? What is your outlook on yes bank stock?
Great article pooja. Of all market participants, 70-90% of the traders lose money. Only 10% make all the money. Being successful by investing/trading is analogous to becoming a successful athlete. If you learn, train and work hard and smart, you will eventually succeed. About 4 years ago when I just started stock trading I had done lots of silly mistakes. After lots of ups and downs, I’ve learned some valuable lessons and now stock trading is my second source of income.
Best 8 Tips to invest in US stocks for the year 2018:
1)Choose the sectors you are interested to invest, and understand the sectors are cyclical or non-cyclical. With higher volatility to minimize the risk invest in defensive sectors like
2) Pick the stocks you want to invest and have a clear motive behind your investment.
3) Check the stock’s MTD, QTD & YTD performance, financials, technical analysis and more insights. For Example Apple. Check out the performance.
4) Compare with its top competitor performances & growth
5) Evaluate its alternatives to choose the best to invest in the current market.
6) Always try to buy good stocks at a lower price than buying low stocks.
7)Your entry and exit timing will be an important factor in your investment, as great investors always say on selloffs and book profit on appreciation.
8) If you are planning for longterm, betting on dividend then choose the best dividends stocks to invest.