Rakesh Jhunjhunwala Was The First Among Equals, Says Ramesh Damani

If you ever hear Ramesh Damani, a legendary investor himself, talk about Rakesh Jhunjhunwala, the respect is evident, not just for a close friend but for an investor with great acumen. It was, therefore, befitting that after Jhunjhunwala's death, we spoke to Damani for anecdotes and insights into the institution called Rakesh Jhunjhunwala.

Damani was part of a close-knit group of friends of Jhunjhunwala and they remained so through thick and thin. The two had met in 1990 through Radhakishan Damani, the owner of grocery chain DMart. The friendship grew through marriage, children and more. They met often, dined and holidayed together, and exchanged investment ideas.

Jhunjhunwala was so far ahead of smart investors like Nemish Shah, Kamal Kabra, Radhakishan Damani, and others, in terms of his outlook and ability to look through corners, Ramesh Damani says. While himself a few years older than Jhunjhunwala, Damani said it would be fair to say that all investors learnt from him.

Damani cites two examples to highlight why Jhunjhunwala stood out among all. Based on rumored estimates of the sum of money that Jhunjhunwala started with to building a portfolio of roughly $4-billion, his compounding rate is over 50%. That, for Damani, leaves little doubt why he was called the pied piper of Dalal Street.

Second, until recently, the Forbes 400 list of billionaires had only one full-time investor: Warren Buffett. The only other such investor on that list is Rakesh Jhunjhunwala.

How did Rakesh Jhunjhunwala achieve this?

His personality was one factor. Damani says that Jhunjhunwala once told him that ever since he became aware of things, he had only one desire in life—to earn money, to earn money, to earn money. According to Damani, the equity market gives exactly what you want, and Rakesh Jhunjhunwala wanted to be the king of the hill. He became exactly that.

Damani says that his ability to forecast the next bull market was uncanny and was almost a God-given ability. He cites an instance when, recently, amid all the uncertainty of Covid, Jhunjhunwala predicted that a new bull market had started and how, if people do not get in, they will rue the chance.

"In the midst of Covid, in a private concall, Jhunjhunwala told us that a new bull market had begun and if you don't get it, we will miss it. Not only did he call this correctly, but he put his money to work."

The understanding from Jhunjhunwala's investment style is that most of his large bets were not reckless speculation, but were based on his understanding of risk and reward. He was not an all or nothing guy. He was not afraid of losses, but the losses were always measured. And that, according to Damani, led him to greater success than others.

Jhunjhunwala was a highly passionate investor, giving markets even greater importance than even his health, according to Damani. While friends were worried about him, he was worried about the market. But, Damani says, if one wants to win a gold medal or if one wants to win an Oscar, it takes huge commitment and a huge 24x7 outlook, which Rakesh Jhunjhunwala gave to the market. That enabled him to back up the truck and load onto stocks—meaning take outsized bets which resulted in tremendous returns.

Damani also explained how optimistic Jhunjhunwala was on India. He cites instances of Jhunjhunwala telling him that 'he saw amazing things happening to India, and that people won't believe the India 25 years from now'. "He would have stars in his eyes when he would talk about the future of the country," Damani says.

Another aspect of Jhunjhunwala's style was his openness about his bets. If anyone asked him about his portfolio, Jhunjhunwala would spell out what he would buy or was going to buy, Damani says, adding that his ability to help and influence people was very high.

Damani believes that the persona of Rakesh Jhunjhunwala will live forever and that a set of investors from past, current or future have lost out on the intelligence of arguably the most well-known faces of Indian capital market: Rakesh Jhunjhunwala.