Rakesh Jhunjhunwala on comparison with Warren Buffett: 'He's far, far ahead'

Rakesh Jhunjhunwala on comparison with Warren Buffett: 'He's far, far ahead'

Just like the “Oracle of Omaha” (Buffett), ace investor Jhunjhunwala started his investment career at a very young age and a fortune from some little-known companies

Jhunjhunwala was always compared with value investor Warren Buffet, the “Oracle of Omaha” Jhunjhunwala was always compared with value investor Warren Buffet, the “Oracle of Omaha”

Known as India’s Warren Buffett, Rakesh Jhunjhunwala started investing in 1985 when he was in college with just Rs 5,000. The Bombay Stock Exchange (now BSE) had 150 listed companies then. His current net worth was around $6 billion, as reported by Reuters, and the BSE now trades in 60,000 companies.

Jhunjhunwala was always compared with value investor Warren Buffett, the “Oracle of Omaha”, who made a great fortune from a very young age. Both the investors believed in looking at the overall performance of the companies and assessing aspects such as debt, performance, profit margins, and others. Both advocated that investors must have patience and should hold on to high-performing stocks for many years.

Touched gold with Tata Tea

Jhunjhunwala was still in his teens when started his investment journey. His father, who worked for the Income Tax department, advised him to buy Tata Tea shares to try his luck in the stock market. He bought 5,000 shares at Rs 43 and sold them for Rs 143 three months later.

That was only the beginning. He made many successful bets, which made him a successful investor, billionaire  

Later he invested in many top companies, such as Titan, CRISIL, Aurobindo Pharma, Aptech Limited, Ion Exchange, MCX, Fortis Healthcare, Praj Industries, and NCC, and inspired thousands of investors to follow his path.

Change of fortune

Jhunjhunwala made a good start in the stock market but his fortune flipped for good when VP Singh’s government 1989 budget put the spotlight on promoting business and the private sector. At that time Madhu Dhanwate was the finance minister and the general sentiment in the country thought he would present a socialist budget. In contrast, Dhanwate presented a budget favourable for the traders and businessmen.

Jhunjhunwala reportedly said that he never thought V.P. Singh would present a socialist budget as he comes from a Thakur family and would support the business community. He purchased stocks based on his analysis.

In his own words, he said that before the budget his net worth was Rs 2 crore, and just after the budget, it was nearly Rs 20 crore.

Similarities with Warren Buffett

Buffett is one of the most influential investors of all time, with a net worth of $96.3 billion as of July 2022. Buffet is the CEO of Berkshire Hathaway, which owns more than 60 companies, including GEICO Corporation, battery maker Duracell, and restaurant chain Dairy Queen.

Buffett at the age of 11 bought his first stock Cities Service Preferred, which was priced at $38 each.

At a very young age, Buffett realised the importance of Value investing, which meant buying stocks at an extraordinary discount when the market or the sector is down, and then building upon it gradually.

At present, Buffett is the seventh richest man in the world, as per Fortune’s list. His company’s top holdings are Apple, Bank of America, American Express, Chevron, and Coca-Cola, as of March 31 this year.

‘Better investor’

In an interaction with Reuters a few years back, Jhunjhunwala said his investment mantras are his own and don’t follow anyone. He said Buffett was a better, mature investor. He reportedly said: “It's not a fitting comparison. In terms of wealth and success and maturity, he's far, far ahead."

Jhunjhunwala had holdings in over 40 companies from construction to banks to real estate. He had recently backed Akasa Air.