India stocks should see a rebound from Oct-Nov, says Jhunjhunwala

Reuters
He says demonetisation and GST impacted the economy, but the fruits of these reforms are yet to come.

Highlights

  • "Gloom and doom is to market what sadness and happiness is to our life"
  • "Economically, we have seen the worst of it. Things should improve from October-November"
  • RJ says trading and investing are two different ball games
Everyone on Dalal Street takes note when it comes from the Big Bull.

Rakesh Jhunjhunwala, an eternal India bull, would have good news for the average stock investor even in the gloomiest of times.

And he has an interesting take on the distress that the domestic stock market is going through. “Gloom and doom is to market what sadness and happiness is to our life,” says he.


At an event in Mumbai last week, the Big Bull told a group of stockbrokers that a market rebound is likely in October.

“Economically, we have seen the worst of it. Things should improve from October-November,” RJ was quoted as saying by a stockbroker who attended the lecture.

Fondly called RJ, the market veteran says he has seen many downfalls during this investing career, and feels investors should be realistic while making their investment decisions and always take measured risks in the equity market.
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Starting his investment journey on Dalal Street with just Rs 5,000 in 1985, Jhunjhunwala made his first Rs 1 crore in just four years and Rs 100 crore in the next four years between 1989 and 1993. He had a stock portfolio worth over Rs 13,000 crore as of August 2, 2019.

When he talks about his investment journey, RJ says he has evolved from a trader into a long-term investor.

“RJ says trading and investing are two different ball games. According to him, trading is exciting and is like de fataflat, le fatafat. He says he doesn’t trade now because it requires lots of efforts and attention,” the stockbroker, who is an ardent follower of the Big Bull and had the privilege of attending one of his recent lecture, recalled the story of his transition.

RJ discourages investors from following their investing icons blindly. “You should learn lessons from others, but try them in your own way. Do not become a slave of Warren Buffet,” says RJ, who is often referred to as India’s own Warren Buffett.
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He also had a word of caution against ‘leveraged trading’. “Leverage is a poison and it should be taken in a measured manner. The money you put in the equity market should be yours only,” says he.

Talking about the India he is so bullish on, RJ says India had created a ‘chalta hai’ system where one could say ‘credit rating agencies ko pata lenge’, but now that system has changed.
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“Integrity is coming to the fore. When this happens, we see displacement,” Jhunjhunwala says. “It is like a cancer patient undergoing chemotherapy, which has side effects,” the broker quoted above recalled him saying.

According to him, the economy did very well till September-October last year. “Now it has been hit by lower sales. The malice in power sector is affecting India’s growth.”

He says demonetisation and GST impacted the economy, but the fruits of these reforms are yet to come.

Talking about stocks and sectors, Jhunjhunwala says he is bullish on pharma sector. “The US generic market has bottomed out. India can get 10-15 per cent growth rate. This industry will never die,” says he. The veteran investors, however, says one should stay away from the PSUs, as corporate governance standards are not good in that space.
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