It all started with the term ‘market operator’. From there on, he turned a ‘bull’ and then India’s ‘Warren Buffett’. The transition in the life of Rakesh Jhunjhunwala, who passed away last week, is a story of turning Rs 5,000 in the 1980s into Rs 40,000 crore today. That is perhaps the story of the Indian stock market over four decades.
He will not be remembered just for the money he made, though. People will read about him for years to demonstrate the use of the stock market for creating wealth.
As most obituaries have pointed out, Jhunjhunwala was a staunch believer in the Indian story. He was a believer in businesses that rode on that growth. He put his money where his mouth was and imposed faith in companies when nobody was interested in them.
Titan Industries, a watch-to-retail jewellery maker of the Tata Group, is an example everyone has talked about. The astonishing surge from Rs 3 in the early 2000s to under Rs 2,500 today is highlighted. But, Jhunjhunwala could hold on to the conviction that eventually created wealth.
There is a lot you can learn from that aspect of his life. Investing is not just about being lucky. It is about the way you shepherd your money towards your life goals.
For most of us, doing the right thing when you have money matters. It concerns your ability to save and allocate the surplus to the suitable asset class.
For Jhunjhunwala, stock market investing was a passion that became a profession. If you belong to that category, you can follow in his footsteps.
You can start diving deeper into the financial markets and learning about timing the market. While you will never master it, you will do better than most individuals in a few years.
If investing is not a passion or a profession, you can do simple things to create adequate financial security for your future self and your family. Jhunjhunwala was an active stock market investor and trader. For most of us who live outside the world of finance, passive investing is an approach to financial well-being.
Yet, you would take a leaf out of Mr Jhunjhunwala’s life if you invested regularly and stayed in the stock market. The average S&P BSE Sensex return over the past thirty years is between 13-15%.
With the help of fintech companies, it is effortless today to invest regularly into an index fund or an exchange-traded fund linked to the index. That return is sufficient for beating inflation over the long term.
Your ability to hold on to these investments depends on your belief in the Indian story, just like Jhunjhunwala. He also recently co-founded an airline. That is just at a time when most pundits are warning against investing in the aviation sector.
Jhunjhunwala was called India’s Warren Buffett in some writings last week. From an investment tactic standpoint, that is right. He had made moves in the market when others were fearful. He had stayed out when everyone else was greedy.
However, the only thing he did not have was Warren Buffett’s good health. In media interviews, Jhunjhunwala expressed regrets about not keeping up with his health needs.
That is another lesson to learn. Money can buy you good things in life, but it cannot buy you happiness or a healthy life if you do not work for it. Your choices will always play a role in the outcome of your financial future.
When it comes to health, you need to take preventive measures to avoid complications in the future. Leading an active life and maintaining a balanced diet is essential to enjoy the wealth you create along with your family.
In the world of investment, there is a simple truth. One cannot be right or wrong. The key to success, as highlighted by the book ‘7 secrets of investing like Warren Buffett’, authors Mary Buffett and Sean Seah point out that managing a diverse portfolio is a smart way of giving yourself room for error. Jhunjhunwala lived by that choice.
(The author is editor-in-chief at www.moneyminute.in)