Rakesh Jhunjhunwala endorses the rule, “the trend is your friend.”
His investment philosophy says “Buy right and hold tight”.
He admits to having been a bear in the Harshad Mehta days and believes that investors should be like chameleons. He has said that the markets are temples of capitalism and believes that they are the ultimate arbiters.
He claims to base his trades, in part, on the business model of a company, its growth potential, and its potential for longevity. He factors in heavily the competitive ability, scalability and management quality of the enterprise. The entrepreneur, according to Jhunjhunwala, makes an invaluable difference to his expected investment returns. According to Jhunjhunwala, believing in the vision and the beliefs of the entrepreneur and evaluating risks that may not be perceived by the entrepreneur are key success factors for a trader.
He invests only in companies whose business he can understand. He does not opt for complex businesses.’Keep it simple’ is his strategy when it comes to investing.
In an interview given to Mumbai Mirror, he has said that one cannot make wealth through borrowed advice. You need to do your own research before making any investment. Free advice can actually cost you later. If you blindly follow someone’s free advice, you might not be paying them anything now but you will realise later when those investment turn out to be duds. That loss can be a lot more than the fees that you pay for an expert’s advise.