3 Trump Cards Of Celebrity Investors

Feb 08, 2017 | 02:14 PM IST

Browsing through the success stories of the famous investors you must have often thought that what are they doing that we aren't? Is it that these elite club members have cracked a success code through which they have succeeded over the years? To put all your queries to rest, let's try to find the similarities in the investment pattern of the celebrity investors like Rakesh Jhunjhunwala for tips.

Though there are many famous investors in India and abroad but Rakesh Jhunjhunwala and Warren Buffett are the only celebrity investors people literally swear by; in fact 'Rakesh Jhunjhunwala Tips' is one of the most searched terms by investors on Google. So let's analyse these famous investors' body of work and try to understand the similarities in their investment pattern. The entire exercise is to identify the broad points in their investment behaviour so the retail investors like you and me can emulate the same for our benefit.

Believe In Value Investing

One of the qualities that binds both Jhunjhunwala and Buffett together is their staunch believe in the creed of value investing. In this regard, both these master investors have almost identical behaviour. Value investing not only nullifies the market risk to a great extent but it is also one of the best methods to identify undervalued stocks. Just one glance at Rakesh Jhunjhunwala's portfolio will give you a fair idea of how he goes about choosing stocks. He picks his companies with clockwork precision. More often than not he tries to stay away from the popular over-priced stocks.

Value investment simply means to invest in sustainable businesses which have undervalued stocks. Usually, value investors like Rakesh Jhunjhunwala and Warren Buffett look to make profit from stocks which have lower profit P/E (price earning) ratios compared to peer group, lower than average price-to-book ratios and higher dividend dispensation. All these statistics are used to analyse the growth potential of the stocks. Only after getting satisfactory results on all the above mentioned counts value investors proceed with their investment.

Invest In Businesses That You Understand

Rakesh Jhunjhunwala tips that behind the stock there is an empire of businesses and industries which propel the stocks to perform. A flourishing business is as important to stock as wheels are important to a vehicle.

However, despite its enormous importance, investors often disregard the details of business before investing. Value investors like Buffett and Jhunjhunwala would never skip this critical step. Warren Buffett goes a step further, he has made it a point to invest only in the businesses which he understands. Hence he only invests in oil, banks, food, insurance, razors, soda and generally stays clear of stock like Information Technology (IT) as he doesn't understand their businesses and products.

On the other hand, Rakesh Jhunjhunwala aka India's Warren Buffett too devotes ample amount of time in examining minute details of the companies he is going to invest in. From Sesa Goa to Titan and Lupin Jhunjhunwala's holdings are bulging with companies which nobody had heard of before he bought stakes in it. It only illustrates his conviction in the businesses and on his own research.

Patience Is A Virtue

For a sapling of investment to grow one needs to give it sunlight of patience and water of time only then this tiny sapling will grow into a sprawling tree. Yes your investment needs a lot of time to grow, sometimes years and decades to give good results. On this count too both Rakesh Jhunjhunwala and Warren Buffett have uncanny similarity. Both have exemplary patience to wait and let the stocks run the full course. It's easier said than done, as the moment stock starts its upward curve ordinary investors book profit in haste and miss out bigger chunk of profit.

It's the temperament which separates celebrity investors from normal investors. They are playing on the same field like others, only their finesse and level-headed manoeuvring elevates their game to a different level.

 

ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While...
FULL BIO

LEAVE A COMMENT

RECOMMENDED READING

Reliance Industries Driven D-Street

Market Walk 22nd February, 2017: Reliance Industries driven market ended on positive note. The Sensex gained 103.12 points to 28864.71 Nifty gained 19.05 points to 8926.09 Reliance gained 11.17% to
Read More>>

Deal With Failures Like A Boss

Inspiring stories are not only about success, but they are also about how successful people deal with failures. If any success story just paints the uni-dimensional image of a person's success, it is bound to mislead the readers. Success can only
Read More>>

Last Hour Buying Gained D-street

Market Walk 21st February, 2017: Volatile market ended on positive after last hour buying. Sensex gained 100.01 points to 28761.59 Nifty gained 28.65 points to 8907.85 Axis Bank gained 5.34% to
Read More>>

Domestic And Global Cues Charging Market

Market Walk 20th February, 2017: Expiry week started on a positive note focusing GST council's approval to law for compensation. The Sensex gained 192.83 points to 28661.58 Nifty lost 57.5 points to 8879.2 TCS gained 4.03% to
Read More>>

Fresh Buying Lift Sentiments

Market Walk 17th February, 2017: Private banking and financial as well as pharma stocks supported market with fresh buying. The Sensex gained 167.48 points to 28468.75 Nifty lost 43.7 points to 8821.7 HDFC gained 6.94% to
Read More>>