Rakesh Jhunjhunwala has long been considered the Warren Buffett of Indian investors. His net worth, according to Forbes, is over $1 billion and the 54-year-old manages his own portfolio as a partner in his asset management firm Rare Enterprise.
As part of an initiative, the Singapore-based Act For Hope, which is organising Singapore Indian Icons of the year 2014, will auction a training session on trading with Jhunjhunwala.
"The Act for Hope event is showcasing the success of some of India's finest minds in the creative fields on an international platform — I am happy to support that effort," says Jhunjhunwala.
While he would be dispensing his wisdom only to one lucky person at the auction, Jhunjhunwala was willing to share a few of his tips and learnings with ETPanache.
What goes on in your mind during a usual trading session?
It's a mix of instinct and analysis. I am mindful of the trend in place and the key drivers relating to a position. I am also disciplined about each position I take — I distinguish between short to medium term trades and long term investments and manage my risks accordingly.
Any expert tips for first-timers and experienced investors?
Do your homework well and always remember to look for value. If you see value, just go for it, it will reward you with returns. Also critical, is to look for sources of profits.
How do you know when is the right time to make an exit from the investment?
The evaluation process of the investment includes two key aspects — first, the present valuation of the company and second, the expected valuation over a certain time. As an investor it is easy to get carried away by 'good news/feelers' from the market that make you stay invested longer than required or vice-versa. Planning your investment timeframe and valuation targets in the beginning helps you take calculated calls, which can then be altered based on current market conditions.
In today's scenario, what looks more favourable: Private equity or stock market?
I look at the opportunity and the valuation and pick up a substantial stake. When one talks about private equity, the investments are normally made at an early stage of the companies' evolution. Such investments are more prone to market risks as compared to companies listed on the stock exchange, where the corporates are already established as well as liable to disclose figures and information on public platforms.
What feelings go through you when you make a mistake following your instincts?
I follow my instinct which is backed by research. Instinct is important because no amount of analysis should prevail in the face of sound common sense. If an investment turns out to be a bad decision, I don't dwell on it too much — the biggest mistake is to get too attached to a bad investment.
At the auctioned trading training session, what would you expect to deliver?
I want the session to be a learning experience for the winner. I would be happy to talk about macro trends, my trading techniques, investing processes and trade ideas.
Are you looking forward to the auction?
I'm looking forward to all of it. Every year Warren Buffett auctions a lunch with him, there are meet and greet sessions with various Hollywood superstars — and all of them get spectacular responses, so it will be intriguing to see what response India generates internationally.
