What was Rakesh Jhunjhunwala's superpower? Devina Mehra shares investing gem from the Big Bull

India’s most celebrated investor, Rakesh Jhunjhunwala, left behind a formidable legacy. Even three years after his passing, investors continue to admire and follow his investing acumen.

Highlighting the true superpower of Big Bull Rakesh Jhunjhunwala, First Global founder Devina Mehra offered investors a reality check, saying his strength went far beyond mere stock-picking. Rather, Mehra, in a post on X, said that Jhunjhunwala’s true edge lay in not chasing last year's winners.

What made Jhunjhunwala stand out?

According to Mehra, many investors are currently tempted to buy US-focused funds simply because the Indian stock market underperformed in the recent Samvat year. However, she reminded readers that the situation was exactly the opposite in 2022, when Indian markets outperformed strongly while US equities struggled. The takeaway, she noted, is clear: last period’s winners rarely remain the next period’s winners.

Mehra added that chasing recent outperformers is “a sure-shot way to underperform.” She highlighted that market returns are not uniform and even the most celebrated investors don't perform in all market cycles.

Mehra referenced an earlier post of hers from 2023, citing Jhunjhunwala himself: “Not every year I make money. I make money in spurts, like 1989–92, 2003–07, 2009–11. In 1994–99, I wouldn't have made any trading income.” This underscores that even the most successful investors cannot be right all the time.

This year, the Indian stock market has been among the underperformers, partly due to the absence of AI-related stocks that have attracted global investors’ attention. While several global markets delivered double-digit returns, the Sensex and Nifty have posted modest gains of around 5–6% in the year. Against this backdrop, there is growing buzz on the Street about shifting investments to markets like the US.

She emphasised that Jhunjhunwala’s decisions were always rooted in conviction, not trends or market hype. This distinction, she noted, is what separates smart money from dumb money.

Essentially, Mehra’s observations signal that dumb money follows past performance, investing in assets that have already gone up. Smart money, in contrast, evaluates fundamentals, business cycles, and structural shifts — and invests in themes that are understandable and implementable.

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.