Rakesh Jhunjhunwala, one of the most successful Indian investors, passed away on 14th August.
I never got an opportunity to meet and interact with him, except for a few moments more than a decade ago. “Respect the market and be prepared for failure” is my faint memory of the advice I heard from him and, in hindsight, it was a great advice that I have never failed to practice.
Mr. Jhunjhunwala is known for his passion for the stock market. But how passionate was he?
In my interaction with Mr. Ramesh Damani on The One Percent Show last year, he shared an anecdote about Mr. Jhunjhunwala that tells it all –
We were together at bar, 3-4 of us, drinking. And as we were leaving the bar, Rakesh slipped and fell. And, you know, someone ran to get him some water, someone ran to get a chair, someone ran to make sure that he had a cloth or whatever. I went to get some water for him. And by the time I came back two minutes later, he was already sitting on a chair, calling his broker talking about the price of gold, Nifty futures, or whatever he was doing.
And that’s an example of focus. You know, I mean, the kind of focus… these great people never took a vacation, you know, 20 years, they probably took a weekend vacation, they never went, they’re constantly involved in the market. And as one of my friends told me, that, it’s not good enough to be 100%, you need to be more than that. Because everyone’s 100%. All the good people are 100% out there, you need to be more focused than even the best focus guy. So they bring, extraordinary amount of focus to the market.
Rakesh is someone who has broken the rules. He is, very loud, very opinionated, extremely confident in his use of the market, and very bullish on India.
Note: You can read the complete transcript of this interview and all my other interviews on The One Percent Show by becoming a Prime Member.
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I use a few thumb rules when it comes to how I manage my personal finances. I made them into an illustration and hope you will find them useful for your own purpose.
If you have any questions around anything you see in this illustration, please send me an email and I will try to respond to the best of my understanding.
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Anand Sridharan of Nalanda Capital recently published a wonderful post on the tale of two generations – his parents’ and his – and how they (have) lived and fared given the conditions they grew up in. Anand concludes his post thus –
I am an out-and-out optimist. I believe that world and India are getting better by the day. Often, someone points out something patently bad (not realizing that bad and better can coexist) and questions my optimism. While I don’t defend my views to others, all I need to do to convince myself is to run an 80s flashback through my mind. All that’s bad today fades into insignificance and I can’t believe it’s the same country.
What of Generation-Next? I don’t have a forecast. I don’t know if they’ll have a ‘miss’ or ‘beat’ versus their own elevated expectations. But here’s my wager. They’ll have a way better life and country than either Generation-Miss or Generation-Beat. But they’ll crib more, though.
Belonging to Anand’s generation, and living through a life almost similar to his, I agree with his thoughts.
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Ben Carlson recently wrote about his four common sense rules of investing, which included –
- Stocks usually go up.
- Sometimes stocks go down.
- The world never actually comes to an end and if it ever does it won’t matter what your portfolio looks like.
- You have to invest in something.
If I may add six common sense investing rules of my own, they would be –
- You must know yourself before investing your money – that will save you a lot of losses and heartburn.
- Don’t focus on return (it’s not in your control anyways), but return per unit of stress you take.
- Maintain reasonable and achievable expectations.
- Invest in what you know – and you know a lot less than you think, and that’s fine.
- Invest with a margin of safety – what could go wrong, would go wrong.
- Give luck due credit – and it’s largely about luck.
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Before I end, here are a few quotes I am reflecting on –
The battles that count aren’t the ones for gold medals. The struggles within yourself – the invisible battles inside all of us – that’s where it’s at. ~ Jesse Owens
We who lived in concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken from a man but one thing: the last of human freedoms – to choose one’s attitude in any given set of circumstances, to choose one’s way. ~ Viktor Frankl
Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth. ~ Marcus Aurelius