RAKESH JHUNJHUNWALA
'The Warren-Buffet of India'. 'The big bull'. 'One man army of Indian stock market'
These are a few terms often associated with this brilliant investor and chartered accountant from India.
He currently is a partner in his asset management firm called Rare enterprises (named after Rakesh and his wife rekha).He is the 51st richest man on earth according to Forbes magazine's 2007 rankings.
Inspite of all these he is a humble man with down to earth attitude.
He started his investing with meagre amount of Rs.5000. Now his assets are estimated at $1.1 billion. Now that's one helluva Rags-to-riches story that you often hear about.
One of his mottos is the famous "Buy right and hold tight". This often is reflected in his portfolio which has always been long term investing. He is well invested in the growth sectors like banking, infrastructure, retailing, etc...
Recently in an interview he said that "Trading is against human nature". He explains this as :
"All risk taking is associated with two human conditions, viz the greed for profits and the fear of losses. The ability to strike the right balance between fear and greed is the most vital determinant of profitable risk taking. Human nature operates on the chance of a gain rather than maximizing gains.
There is lack of focus on the magnitude of gains and losses, which is why I maintain that successful trading and investing requires you to go against the basic tenets of human nature. We are programmed to learn, and we learn to a pain. But in trading and investing, you have to learn to take a loss.
In trading, the first and the last principle is that trading is trend and price based, and not opinion based. This requires you to square an unfavorable trade regardless of your opinion. This means that if I buy a stock at Rs 100, and then the price falls to Rs 95, I take my loss and square off my trade. This is counter-intuitive to most people and This is the one common quality of all successful traders."
That's one smart investor with a keen eye on stock market and human nature in general!!
2008-02-05
THE BIG BULL
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