Rakesh Jhunjhunwala is undoubtedly one of the most successful investors in the Indian stock markets. He is widely regarded by many as ‘Warren Buffet of India’ since many of his investment principles are remarkably similar to that of Warren Buffet. Many of his investible principles are profound and we can learn a lot from them.

Let us today look at the top 5 investment principles that Rakesh Jhunjhunwala follows so that we can incorporate them onto our style of investing.

1. Be Opportunistic: Rakesh Jhunjhunwala follows the principles of value investing, i.e. buying a stock when it is trading in the market at a price (valuation) that is lower than its fundamentals. He says that we should be opportunistic and do our homework thoroughly to identify the right stocks to buy. Thereafter we should “make the investment when the stock is not popular”, i. e., it is being overlooked by the market. This will allow us to get the stock at a very attractive valuation and make money when the share price goes up.

2. Be Optimistic: A critically important part of investing in the markets is to always think positively. When we think positively, we will be able to make informed and logical decisions and will not feel pessimistic or jittery whenever the markets become volatile. He also says that we should always believe in India’s growth story and our capabilities. This will give us a strong conviction and we will be able to make the right decisions regarding our investments.

3. Buy for the Long term: In the short term, the markets often move quickly and irrationally, making it difficult for investors to keep their patience and take the right decisions. Hence, Rakesh Jhunjhunwala always advocates investing for the long term. He also says that we should always ‘invest in businesses and not in companies.’ While making investment decisions we should look at the fundamental factors like the quality of its management, their vision, the competitive edge of the company, culture, future demand for products, etc. If most of these are positive, then we should think of investing in the company and the probability that we will make money from the investment will automatically go up.

4. Consistency: We should invest your money in the stock markets consistently and hold on to our investments with a lot of patience. If we stick to investing for the long term, learn from our experience and adjust our investing style accordingly, we will surely make money from the market, sooner or later.

5. Control your Emotions: An important aspect of making money from the market is having a strong grip on our emotions. We should be calculative and logical while making every investment and not get worried whenever the market moves adversely.

These are the 5 learnings from Rakesh Jhunjhunwala that have helped me to become a better investor. If you follow these diligently, we are sure you will also be tasting success in the share markets.

This article is for education purpose only. Kindly consult with your financial advisor before doing any kind of investment.