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You’ve probably read enough articles about how someone created a company or business that enabled them to amass a net worth of billions. However, today we’ll tell you about a man who made an investment of just Rs 5000 and amassed a net worth in the billions. His investing strategy was a mirror of his personality.
Below are 5 financial lessons that we can learn from the master:
The Power of Patience
You must comprehend that investing is a long-term endeavour if you want to be a successful investor. You should be aware that it will take a decade or longer to get a return on your money. Long-term investor Rakesh Jhunjhunwala is referred to as the “Big Bull of Dalal Street.” He is renowned for having a lot of patience and holding onto his investments for many years. He has been investing in Titan Company Ltd. for more than 20 years and has seen over 1,000% returns on his initial stock investment. He claims that he invests in a company’s business rather than its stock and that he never sells shares, even when the stock market is experiencing declines. He has observed so many stock market cycles that he is not alarmed by them.
Seizing the Moment
Rakesh Jhunjhunwala emphasizes the importance of capitalising on market opportunities, stating that success in the stock market depends on one’s character and temperament. He cites examples like the 2008 global financial crisis and the 2014 election stock rally, emphasizing the need to be aware of risk tolerance levels and not be afraid to make losses. Investing in the stock market is risky, but it can yield cyclical returns.
Emotional Attachment to Stocks Could Lead to Financial Loss
A serious investment error is emotional investing. This is frequently caused by ignorance and poor comprehension. Rajesh Jhunjhunwala argues that in order to be successful, investors must suppress their feelings and act robotically. A strict investment philosophy and belief in the economic cycle are necessary for consistency in investing. Instead of being afraid of greed and fear, smart investors should embrace counterintuitive actions, such as purchasing low and selling high.
Look for small-cap companies that have a track record of success and strong product demand.
In order to maximize your returns as an investor, look for small-cap companies with a track record of success, a strong market for their goods or services, and room for expansion. These companies have the capacity to greatly increase your initial investment. Rakesh Jhunjhunwala claims that he considers the product’s life cycle. He invests in those businesses if he notices that Indians are consuming more of a certain product and there is potential for this demand in the future. For instance, based on new gaming legislation by the government that may support the business, he had observed product demand and invested in Delta Corp.
Having a Passion for Investing is the Key to Success
Rakesh Jhunjhunwala, a stock market enthusiast, believes that developing a passion for learning should involve reading and talking to others in the industry. He believes that relying on others for stock market tips or suggestions will hinder learning. Jhunjhunwala’s passion for investing began as a child, leading him to make smart decisions and stay motivated despite initial failures.
