For someone who made his first big killing by short selling shares at the peak of the 1992 bull market, and then again during the dot com boom of 2001, the nickname Big Bull would have left him amused. He came close to losing it all twice, but only to have Lady Luck with him in the end.
The billionaire investor, trader,entrepreneur, philanthropist, and risque one-liners died in Mumbai of cardiac arrest. Jhunjhunwala had a sudden decline in his health over the last few months. Lady Luck looked in a different direction.
Jhunjhunwala's family includes his wife Rekha, two sons and a daughter.
A senior income tax official's son was trained as an accountant. He started his career in the stock market in 1985 by investing high rates of interest. A client of Jhunjhunwala's brother gave him a large sum of money.
Unlike many others who insisted on some form of security, another gentleman by the name of Mendoza refused to accept any kind of security. Jhunjhunwala would pay him 24 percent interest annually until he was no longer obliged to do so.
The funds were invested in the company. He built his own capital buffer while he was on a winning streak. Jhunjhunwal struggled for the next couple of years after a mediocre run. Jhunjhunwala admitted that he could only stay in there because his father was taking care of the household expenses.
A friend of Jhunjhunwala suggested an idea to him, and things began to look up for him.
But an even bolder gamble was on the VP Singh-led Janata Dal’s maiden Budget in 1990. Jhunjhunwala bet the house, convinced that the Budget was likely to be business and market-friendly, and not one with socialist overtones, as the market was fearing.One of his interviews said that he was confident that VP Singh would not hurt the market.
He got good news for his wife when he came home that she could finally buy the air conditioner she had been asking for.
A defining move in the career ofRJ.
The defining move of his career was when he joined ranks with the market players who felt that the manic bull market of 1991-93 was unsustainable. The Big Bull of Dalal Street was responsible for driving shares of companies to highs.
At that time, Jhunjhunwala was still a part of that camp of bears that had veterans like Hemedra Kothari in the group. After profiting from the upswing, the bears realized that the lofty valuations could not be justified.
Jhunjhunwala was on the edge of ruin as share prices continued to rise one way despite the spirited efforts of the bears. The shares went into a free fall after it was discovered that Harshad Mehta had been using bank funds to increase stock prices. He made around 30 million dollars on his bearish bets.
Jhunjhunwala decided to look for stocks that would create wealth in the future. Seven years of trading would have made him realize that the big money could only be made by investing in sound companies and reaping the benefits over the long term. The early birds in MNC stocks, like Glaxo, were pulling in good money through dividends.
His teachers.
Value investors like the late Chandrakant Sampat influenced Jhunjhunwal. Damani was a mentor to the young Jhunjhunwala and would remain so for the rest of his life.
Jhunjhunwala had said in an interview that it was difficult to define a relationship.
Without my father and him, I don't know where I'd be. He has taught me a lot more than I thought. He has taught me that being a parent is more important than anything else in life. He has to listen to other person's point of view.
In the 90s, fellow brokers and traders spoke of the two of them in the same breath as GS-Rakesh, even though they had differing views on the same stock. DS Damani was referred to by his family's broking card.
In the 90s, Jhunjhunwala and Damani owned a portfolio of some of the best Multinational Corporations. The traders were still interested in making short-term profits.
It was inevitable that the duo would face off with him when he came back in the late 90s. The decision was taken in 1998. Mehta increased the prices of Videocon, Sterlite, and BPL with the help of the management.
Damani and Jhunjhunwala decided to short-sell the shares because they didn't think the stock prices justified the high valuations. They lost money initially, but recovered once Mehta stopped supporting the prices. The stock prices went into a tailspin and wouldn't recover for a while. The Big Bull was no longer with us.
Less than a couple of years later, Jhunjhunwala was back to doing what he was best known for—targeting stocks of companies he thought to be overvalued. And this time, he was locked in a battle with the upcoming Big Bull of Dalal Street, Ketan Parekh.Jhunjhunwala was never a fan of technology shares and decided to short sell the shares of Global Telesystems. He got his bets terribly wrong.
He was once again on edge of ruin after the stock market rallied for much longer than he had anticipated. After the end of the bull markets, he won again. His strategy was profitable but not good enough to keep him away from the regulators. Jhunjhunwala and his mentor Damani were accused of market manipulation. He would later be acquitted of the charges.
Jhunjhunwala seems to have changed his approach to trading and investing after the 2001 bull market ended. He wants to be seen as an investor and not a trader. That image was burned by investing in the right companies.
After accounting for dividends, splits, and bonuses, his average cost of acquisition in many stocks was negligible. He wouldn't be seen as Damani's alter ego anymore. It would be a different person now, and not a different person in the future. Damani had stopped playing on the stock market and was focused on building a retail chain.
He was an excellent investor, very good at trading, and also a venture capitalist, according to the co- founder of ENAM.
You could see that from the quality of the stocks he chose. He was a great person. Shah can't say how many traders and brokers he has helped during their times of crises.
Jhunjhunwala's conviction as a trader and investor was praised by one of his former rivals.
He had the ability to succeed as an investor and trader.
He would stay for as long as he could after he was convinced. The results can be seen in a stock like Titan.
At the peak of the technology rally of 1999-00, Parekh and Jhunjhunwala were arch rivals, but since then they have been talking and playing cards together.
I have bad habits.
Jhunjhunwal made no bones about his weakness for the things that life had to offer. I have bad habits. I eat like a pig and drink like a fish. I don't engage in physical activity. He once said in an interview with a tabloid that his health worried him.
The same discipline that made Jhunjhunwala a successful trader and investor is missing when it comes to his health habits.
He did try. He said in an interview that he made a lot of resolutions but they all failed.
He responded to well-wishers who told him to take care of his health in a way that made sense. You are going to die once you arrive. It would be great to have a good time when you are at it.
When the market was not yet aware of the true value of stocks, United Spirits and United Breweries were among his biggest holdings. As societies become prosperous, demand for liquor will grow. He made handsome profits from the multi-baggers.
You won't find a lot of people in his position talking about hot female actors on national television. He wasn't good at expressing his views at public forums. A general television channel hosted a conclave last year in which Jhunjhunwala said that new businesses should be sold. He advised caution in his own style as well.
Issuing a statement like "Par abhi nahin karne ka" He saidChaddi nikal jayegi. He could turn on journalists without warning if they questioned him in a way he didn't like. People outside of journalism thought it was bad.
Jhunjhunwala was a man who wore his heart on his sleeve, according to one of his peers. He had something on his tongue. Shah said that most people seemed to be put off by his bluntness.
There were plenty of lemons in Jhunjhunwala's portfolio, something no investor can escape, even though he made a lot of money in stocks.
The tryst with IT stocks was by the man.
He had a brush with technology many times. As the tide for IT services stocks began to turn, Jhunjhunwala took a bullish view on NIIT.
He was in for a rude shock when the promoter cut their stake without warning. After dumping the stock, Jhunjhunwala was rewarded with insult and injury.
He was pulled up by SEBI who wanted to know why he had heaped praise on the stock a few weeks before changing his mind.
His tryst with Geometric Software ended on a sour note after he had to pay a fine. Aptech was one of the companies in which Jhunjhunwala was a promoter. Adding insult to injury was the fact that Aptech has been one of the worst performers in the IT sector for a long time.
He tried to get A2Z Maintenance and Engineering Services public. Jhunjhunwala leaned on some of his friends and associates to ensure that the initial public offering was fully subscribed despite the advice of his friends.
A2Z joined the ranks of penny stocks a few years after its disastrous debut on the stock market. There are many duds, including HOEC, Bilcare, Sayaji Hotels, and Pipavav Defence. Some of the initial successes like Karur Vysya Bank have failed over the past few years.
Compared to Warren Buffet.
He didn't like being compared to Warren Buffet. He bristled at any questions about his wealth. Jhunjhunwala's stock response was "If you can count it, you don't have it"
Retail investors hang on to every word of Jhunjhunwala, hoping to make a fortune one day. Jhunjhunwala has said many times that nobody should buy a stock if the only reason was that someone had put money in it.
Critics say that Jhunjhunwala has not had another winner on the scale of Titan and that his reputation is more of past glory.
There is a question in financial markets that determines how an investor should be judged.
When you were right and when you were wrong, how much did you make and how much did you lose?
The score card of Jhunjhunwal speaks for itself. His 5 percent stake in Titan is worth over Rs 11,000 cr at the current market price and accounts for a third of his portfolio value of listed companies.
Jhunjhunwala's career in the stock is an example of one of Buffet's favourite sayings.
If you don't do a lot of wrong things, you can do a few things right.
RIP Rakesh Jhunjhunwala
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