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‘End of an Era’ – The Big Bull Rakesh Jhunjhunwala Passes Away
by Manish Thole
I am saddened by the terrible news of the passing away of veteran investor, business magnate, and stock trader Shri Rakesh Jhunjhunwala this morning. May the departed soul rest in eternal peace and may Prabhu Mahaveer give strength to his family members and loved ones. Om Shanti
The man who led many young minds to start up the trading journey!!
Rakesh Jhunjhunwala’s life is a lesson that good health is the ultimate wealth. Because beyond a few crores, it is just a number. This covid lockdown created a new class of homebound traders, who are not doing any physical activity. A combination of a sedentary lifestyle plus lack of physical activity plus a stressed mind is a deadly combination.
A few years ago for a new year once RJ was asked what his wish was. He said, Doctors had advised his movement and to give priority to his health. He admitted he was lazy, and somehow avoiding it plus he loved his drinks in the evening.
Finally, it proved to be a fatal combination. Physical activity is a must. Walking in the Sun daily is a must.
62 is definitely no age to die.
Rakesh Jhunjhunwala Journey in Stock Market
Rakesh Jhunjhunwala did not start with Rs 5,000. The media twisted what he told. He always says that:
a. He had no money. All he had was Rs 5,000 saved from his articles days.
b. His father wouldn’t give him money and his father forbade him from asking his father’s friends for money.
c. His brother was a practicing CA and had a wealthy client who lent him Rs 12.5 Lakhs at 18% p.a. Whatever shares he purchased from her money, he gave to her as collateral.
d. Another rich “Christian Gentleman” gave him a few lakhs at 18% to 21% p.a.
He invested the entire amount in Tata Power and the dividend he got covered the interest payments. The stock price of Tata Power skyrocketed.
He invested in Tata Tea at Rs 43 and sold off those shares at Rs 143.
For 4 years he did not do any trading. “Badla” as Futures were called then, was a popular financing option and he first used it Sesa Goa shares only.
He bet his entire net worth (Rs 2.5 Crores) on the 1989 Madhu Dandavate’s budget and was worth Rs 50 Crores in a month after the budget.
This is no mean feat. Imagine a 25-year-old today, borrowing ~ Rs 2.5 Crores at 18% p.a. And investing it in stocks. What is the probability of betting your entire net worth on a single budget and making 25x returns in a month? Most of the traders and investors in such cases would go bankrupt. What Rakesh Jhunjhunwala did is no mean feat. I doubt if anyone else can even repeat it!
He was the greatest risk manager in the world and then the greatest trader too. The best trader is not one who generates the highest return, but one who uses leverage wisely.
So the darkest truth is that he is what every trader/investor wants to be but no one will match his feat. Even Jesse Livermore touted as the greatest trader ever, went bust many times. Leverage is a two-sided sword, most of us cannot handle it.