Rakesh Jhunjhunwala Death Anniversary: How Big Bull’s big bet on high-quality stocks led to remarkable rewards

'If the girl is pretty, the suitor will come," was one of Rakesh Jhunjhunwala’s most quoted sayings. On his second death anniversary, Siddharth Oberoi, Founder and CIO at Prudent Equity, said that the above analogy highlighted the ace investor's belief in the intrinsic value of a high-quality company.

Oberoi also noted that Jhunjhunwala stressed the importance of not overpaying. His strategy was to invest early when valuations were reasonable or dirt cheap and to avoid completely unreasonable valuations.

Today marks the second anniversary of the passing of Rakesh Jhunjhunwala, the legendary investor often hailed as the "Big Bull" of Indian stock markets. Known for his exceptional ability to spot value in the stock market, Jhunjhunwala's investment philosophy continues to inspire investors worldwide.

“Jhunjhunwala was a staunch advocate for understanding the potential addressable market early and exercising patience. His approach was not just about identifying top-notch businesses—those with monopoly power or significant competitive advantages—but also about having the foresight to see their long-term potential and the discipline to ride out periods of volatility,” said Oberoi, eloquently capturing Jhunjhunwala’s approach to investing

Jhunjhunwala, who passed away at the age of 62 in 2022 due to kidney-related issues, built his legacy on a foundation of patience and a deep understanding of market dynamics. His investment strategy was not about chasing short-term gains but about identifying companies with solid fundamentals and holding onto them through market fluctuations.

The Tata Motors Story

A notable example of Jhunjhunwala’s investment acumen was his bullish stance on Tata Motors during the COVID-19 pandemic in 2020, informed Oberoi. "At a time when the company’s market capitalization was disproportionately low compared to its annual sales, Jhunjhunwala saw an opportunity that many others overlooked. Despite the short-term challenges faced by the auto sector, he invested in Tata Motors with a long-term perspective, confident in its potential to bounce back. His foresight proved correct as the company’s stock saw significant gains in the following years," Oberoi elaborated.

Since March 2020, the Tata Motors stock has soared 1396 percent.

Oberoi further emphasised on Jhunjhunwala's strategy: “His approach serves as a powerful reminder to stay bullish on India’s growth story, recognize the vast opportunities, and have the patience to wait for your investments to mature. It’s a strategy that, when executed with careful consideration to valuations, can lead to remarkable rewards.”

Jhunjhunwala’s influence extended beyond his stock picks; he was a beacon of optimism for the Indian economy. He believed in India’s growth potential and invested heavily in its future. His investments were not just about financial returns but also about contributing to the country’s economic development.

As we reflect on Jhunjhunwala’s contributions to the world of investing, his approach—rooted in patience, foresight, and a deep understanding of market fundamentals—continues to guide investors today. His teachings encourage us to look beyond short-term market fluctuations, focus on the intrinsic value of our investments, and maintain the patience required to achieve long-term success.

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.