Rakesh Jhunjhunwala On Value Investing

By Author: Niveza
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Stock markets have always been a center of much discussion amongst the economists and investors. Expert investors have their own propositions about the Indian Economy, and the type of investments they would want to make whether the market is bullish or not. Value investing has been a favorite topic where investors have a varied opinion and seek guidance from an investment guru.

Stating the views of Rajesh Jhunjhunwala on Value Investing, looking for a stock that is trading at a value, lower than it’s expected or intrinsic value, but at the same time have the insight to judge the future prospects of the company. He lays emphasis on estimating the future scales of the company by analyzing its trends and doing a research in the factors that influence.

Jhunjhunwala, also referred to as the Indian Warren Buffett, explains how to understand the market capitalization of a company that an investor wants to have a value investment in, and research for the reasons as to why or why not should the company make profits, and ultimately decide the future scales of the company. Advising the investors, Jhunjhunwala states that, ...
... companies and hence the stock market may change due to several factors of which elements such as changing technologies, Marketing trends, Distribution of profits, resource management, branding, etc. are paramount.

Always be on the outlook of companies, that may be are small cap in the present scenario, but have a bright chance of turning into a large cap by the time you would want to sell off the stocks. Rakesh says, looking at the ability of the company to scale, the decision to make a value investment shall be made. Exemplifying some IT and other mid cap stocks, he explained that making profit out of value investment hugely depends on analysis that an investor makes, and the time he chooses to sell out.

Adding to his theory of examining profits and future prospects, Jhunjhunwala disclosed how after four-five years of investing and profit booking in a company, he would examine and reform his strategies, owing to the dynamic nature of the market and its changing trends. He also told that, one should not bother about the quarterly financial reports and should avoid forming a rigid mindset.

Rajesh Jhunjhunwala believes that an investor should be very open minded and should be less moved with the short term sentiments of the market. The market is dynamic, and so should be the investor and his strategies for value investment.

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