The three factors on which Rakesh Jhunjhunwala decides to sell a share

The three factors on which Rakesh Jhunjhunwala decides to sell a share

Speaking at the India Today Conclave 2021, Jhunjhunwala said that while markets can correct, there will be no reversal of sorts.

Ace investor Rakesh Jhunjhunwala (Photo: Chandradeep Kumar) Ace investor Rakesh Jhunjhunwala (Photo: Chandradeep Kumar)

There have been many instances when ace investor Rakesh Jhunjhunwala has made hundreds of crores in a single trading session in the stock market. Given the size and variety of his portfolio stocks, a single day can indeed net him millions.  

Just a day ago, there were reports that the surge in Tata Group stocks made Jhunjhunwala richer by over Rs1,000 crore, courtesy his stake in Titan and Tata Motors. While he holds a stake of 1.14 per cent in Tata Motors, Jhunjhunwala, along with his wife Rekha, holds around 4.81 per cent in Titan. Participating in the 19th edition of the India Today Conclave 2021, Jhunjhunwala spoke at length about his investing strategies.

Over the years, the high-profile investor has accumulated many stocks in his portfolio. While Titan and Tata Motors are his biggest bets, data from Trendlyne shows that some of his other biggest stakes are held in companies like Crisil, Nazara Technologies, Escorts, Fortis Healthcare, Lupin, and SAIL, among others.  

But while he has been accumulating stocks over the years, just like any other stock market investor, he also needs to sell to book profits or churn his portfolio. And, there are three key factors based on which the investor with a huge fan following decides to sell.  

According to the star investor of the Indian stock market, there are three parameters.  

"I sell for three reasons. If earnings have peaked or the PE (price to earnings ratio) has peaked or I feel I can get a better investment [opportunity elsewhere]. Otherwise, I don't sell generally," he said.  

On the overall market trend, Jhunjhunwala pointed out that while markets could correct, there will be sideways or circular correction wherein a section of stocks may correct while another section might rise further.  

"Correction can happen but I see no reversal. Side-way correction can happen and stocks may correct but index as a whole has not corrected. I am very bullish," he said when asked if the markets would correct given the current high valuations.   

Referring to the pandemic, he said that humanity has faced greater challenges in the past and while there is no doubt that there is a crisis, his stock buying decisions are solely based on the risk-reward ratios.  

According to Jhunjhunwala, valuations and markets are driven by human psychology, including greed and fear, and that has not changed over the years.  

On the issue of divestment, he said that he believes that divestment will be on track this year as there is a lot of interest from potential buyers and bidders for companies like BPCL, LIC, Container Corporation of India, and the Shipping Corporation of India.  

"I think between now and March 2022, we could see 8 to 10 divestments," he said at the India Today Conclave 2021. 

Also Read: Billionaire investor Rakesh Jhunjhunwala adds Canara Bank to his portfolio in Q2

Also Read: Rakesh Jhunjhunwala portfolio: Big bull on his big bets on Tata Motors, Nazara Tech