A tribute to Rakesh Jhunjhunwala: His bullishness will be seen as prescient

Everything Rakesh foresaw for India will happen in the coming years

Rakesh Jhunjhunwala passed away unexpectedly on August 14 at just 62 years of age. His passing was a shock as he had seemed in no danger despite being in and out of the hospital over the last few months. This is such a tragic ending for a larger-than-life personality.

RJ, as I called him, was a good friend and someone I looked up to and learnt a great deal from over the past 20-odd years of our friendship. We would meet regularly for lunch at his home or office and discuss markets, companies, our perception of the future of India, and his latest pet project. He would often reminisce about his early days in the market and his early winners and mistakes. He had fascinating insights on all the major market participants over the last few decades.

Besides the chance to have great food, our meetings always offered an opportunity to learn from him as his insights on companies and the markets were truly unique. While we had almost no overlap in our portfolios, we would always try to understand why we disagreed on our favourite investments. He was always keen to learn what global investors thought about India.

Rakesh was an astonishing success story, being self-made and having taken his wealth from Rs 5,000 to Rs 50,000 crore during his lifetime. His size and duration of holdings in companies like Titan, Lupin, Crisil and Tata Motors are legendary. He had a breathtakingly simple but precise investment thesis on each one of these stocks and held his positions for more than a decade. He single-handedly showed the world and Indians the type of wealth creation that could be legitimately made in the Indian stock market. It can be honestly said he changed a generation’s thinking in India on the sanctity and legitimacy of financial markets.

He was an inveterate bull on India, forever convinced that India’s time had finally come and that the coming decade would be one of immense growth and wealth creation for the country. He wanted Indians to believe in their own country and invest in the markets. He did not want foreign capital to be the sole beneficiary of our growth. His conviction was immense and unshakeable. Whenever I would express frustration at some policy confusion or short-term challenge, he would counsel patience and focus on the big picture. No one could convince him that this was not India’s time in the sun. He would happily take on anyone with a contrary view on India, whether they be based locally or overseas.

I have never met anyone who could take and control risk in the manner that he could. His position sizes were legendary, but he understood risk and leverage. He would never risk it all. His trading was instinctive and he had a great feel of the markets.

Rakesh was unique in that for the same stock he had a trading book and a long-term book and he could distinguish between the two in his mind. He had the mindset to simultaneously take a one-day view and a five-year holding horizon for the same stock. To be able to keep both positions and both time horizons in your mind simultaneously is incredibly rare. It is even more rare to be successful in both short-term trading, and long-term investing. Most people can just about do one. He had the ability to go both long and short, an increasingly rare skill. His word was his bond and he would never back out of a commitment.

Illustration: Binay Sinha
 

He was also successful across public markets, venture capital, private equity, structured credit and other asset classes, with large investments in each category. How many people have been successful across the equity life cycle? He also invested in start-ups. He had the flexibility of mind to invest in whatever made sense to him. No artificial silos prevented him from doing what he thought was right.  He was also able to invest across industries from gaming, biotech and health insurance to steel, banking and autos. His circle of competence was as wide as I have ever seen.

Rakesh was a voracious reader and learner. He was fascinated with all asset classes and global markets. As far as I know, he had no other hobby. He just loved the game of investing too much. He had a great curiosity about companies and business leaders. What made a business successful?

He was a good reader of people and their motivations. He was more trusting of promoters than I thought wise at times, but he was only accountable to himself. While we disagreed on many companies and promoters, he always had a well-thought-out thesis on why someone had changed their spots.

Rakesh was a big believer in giving back to society. He donated generously to various causes ranging from Ashoka University to setting up a foster home for children. He was determined to give away a large portion of his wealth to various charitable causes.

A family man, we never had a conversation in which he did not mention his wife, children and father multiple times. He always gave his wife and parents the credit for his success. He was always grateful for the respect he had earned from society, and never took it for granted.

Rakesh was also someone who always tried to help people. There are legions of people in the markets and across professions who owe their start and success to RJ. He made more people than will ever be known. When I started my fund 15 years ago, he was one of the few people who went out of their way to help and encourage me.  It did not matter to him whether I was a big fund manager or managing a pittance. We were friends and that is all that mattered.

His impact on the Indian markets and ecosystem is obvious from the wave of condolences. Whether it be politicians, industrialists, investors, global media or the average retail investor, everyone has expressed their sadness. What could be a greater tribute?

The saddest thing will be that everything he foresaw for India will happen in the coming years. His beloved country will finally deliver on its potential. As he would say, we will regain our rightful place in the world and gain global respect and relevance. His bullishness will be seen as prescient, but he will not be there to be proven right once again.

Rakesh lived his life on his and only his terms. He would have it no other way. Goodbye, old friend. We will miss you. Om Shanti!

The writer is with Amansa Capital