5 stocks and key lessons learnt from the Big Bull - Rakesh Jhunjhunwala

Rakesh Jhunjhunwala, one of India’s most celebrated investors, has left behind a legacy filled with invaluable lessons for navigating the financial markets. Known as the "Big Bull" of the Indian stock market, his approach was marked by a unique blend of vision, patience, thorough research, and a willingness to take calculated risks. On his second death anniversary, Akshat Garg, CFA, AVP, Choice Wealth, reflected on five key lessons learned from Jhunjhunwala's investing strategies.

1. Long-Term Vision

"Jhunjhunwala’s investment in Titan Company highlights the power of patience. By staying invested as Titan grew from a niche player to a market leader, he reaped significant rewards," said Garg.

Titan is often considered Jhunjhunwala's favorite stock. He began acquiring shares in 2002-03 when the stock was priced around ₹3-4, and today, the stock trades around ₹3,400. Jhunjhunwala steadily increased his stake over the years, even holding firm during the 2008 global recession. By 2012, he had raised his stake to 10.28 percent. Currently, Rakesh and Rekha Jhunjhunwala jointly hold a 5.05 percent stake in Titan, valued at ₹11,081 crore, showcasing the stock's immense growth and Jhunjhunwala's legendary foresight.

2. Thorough Research

Garg also observed that Jhunjhunwala's choice of Lupin exemplifies the importance of deep research. "Understanding Lupin’s global expansion and product pipeline was key to its success," he added.

Lupin was another key stock in Jhunjhunwala's portfolio that brought him substantial gains. He began investing in Lupin in 2003 when its market cap was around ₹500 crore. By June 2008, Jhunjhunwala held a 4.29 percent stake valued at ₹154 crore. Over time, he gradually reduced his holdings and fully exited the company in September last year when Lupin's market cap had soared to approximately ₹44,000 crore. The stock was trading around ₹1,100 at that time, demonstrating Jhunjhunwala's ability to capitalize on well-researched opportunities.

3. Patience and Conviction

During the 2008 crisis, Jhunjhunwala’s decision to stick with investments like CRISIL showed that holding firm through volatility can lead to long-term gains.

Jhunjhunwala began investing in CRISIL in 2003, starting with 10,000 shares. By September 2006, he had expanded his holdings to 5.5 million shares, acquired at prices ranging from ₹400 to ₹500. In 2013, Rekha Jhunjhunwala sold 400,000 shares for over ₹46 crore. Currently, they hold a 5.48 percent stake in the rating agency, valued at ₹1,322 crore. This investment is a testament to his patience and conviction in the face of market fluctuations.

4. Calculated Risks

Jhunjhunwala’s bet on Viceroy Hotels demonstrated the value of informed risk-taking. Despite uncertainties, his well-researched investment strategy paid off, observed Garg.

Jhunjhunwala began buying Viceroy Hotels in December 2015, starting with a 1.18 percent stake, which he increased to 13.46 percent by September 2016. He later started reducing his stake, cutting it below 1 percent by March 2018. Though the company was later included in BSE and NSE's additional surveillance measures (ASM) list, Jhunjhunwala’s ability to navigate such risky investments underscored his skill in managing calculated risks.

5. Growth Potential

Garg further emphasized that investing in Aptech, an education company, illustrated Jhunjhunwala's skill in spotting growth trends. Recognizing the demand for educational services in India was a strategic move with promising returns.

Jhunjhunwala's investment in Aptech highlighted his ability to identify and capitalize on emerging sectors. His foresight in recognizing the growing demand for educational services in India underscored his knack for spotting trends that offered significant growth potential. This strategic investment is yet another example of Jhunjhunwala’s ability to combine vision with action, leading to long-term success.

Rakesh Jhunjhunwala's investment journey serves as a powerful guide for investors. His ability to balance patience with conviction, take calculated risks, and thoroughly research his investments has left an indelible mark on the Indian financial markets. As investors reflect on his legacy, the lessons he imparted will continue to inspire and guide those navigating the complex world of investing.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.