Hey friends, Rakesh Ji, in 2006, by selling stocks of CRISIL company, purchased a house worth 27 crores!
By 2020, the worth of that house was 45 crores! The interesting thing here is that, If he didn’t sell the stocks of CRISIL company and hold them, the value of those stocks would have been more than 1k crores!
He says he doesn’t regret it! He knew why he was making this decision! He knew that after leaving this world, the most important people in his life, his family, would not remember him for his earnings and investments! They will remember him, that how many people has he helped.
What value did he add to their life? His wife and kids won’t remember him for his earnings! He was a billionaire!
They would remember him because he was a good father and a good husband who gave them a good life, a great house to live in, and a great life where they won’t feel monetary problems!
Similarly, we will remember him because he has taught us many investing lessons, which helped our economy to grow, directly and indirectly!
You know, many investors, people with an interest in finance, tracked Rakesh’s portfolio very closely!
And when Rakesh Ji used to invest a big amount in any stock, it became breaking news! Buying it would increase the value of that stock!
In the past 2-3 decades, there were many people who blindly followed Rakesh Ji and created their wealth!
Unfortunately, we are not going to hear this news now! We won’t be able to actively track their portfolio! Because he is not with us! But still, some of the things are with us even today!
Like, his story and investing lessons will always be with us! So today, in this extremely special blog, I’m going to share his investing lessons!
1. Take Risks
His interest in investing and the stock market was aroused when he saw his father talk a lot about the stock market with his friends!
Which stock is doing well in the market, which is doing badly, and what are the market conditions?
Listening to all these, he started tracking stocks in newspapers. He learned about the stock market, researched it, and started learning about it!
Due to this, he became interested in the stock market! But Rakesh’s father didn’t give him money to invest!
And he also forbade him to take borrowed money! Rakesh Ji took money from his brother’s clients!
He promised that he would give more returns than banks! One client gave him 2.5 lakh rupees! And the other one gave ten lakhs!
After doing a lot of research, he invested in Tata tea. In 1986, he made a huge profit! There, with 46rs./share, he bought 5000 shares.
In just three months, their value increased to 143rs/share! This means their price tripled! By doing this, he got a huge profit, but the important thing was that he got the confidence to earn money from the stock market!
And from here, his journey started! He says that if he had not taken that risk, we probably wouldn’t be talking about him today!
There is a quote by Rakesh Ji, ‘Never afraid to take risks. But only risk so much… that you can afford to stand the next day!
And this is lesson no.1. Take risks. It’s a good thing! Take as much risk as you can afford! Don’t take such a risk that can break you completely and not let you stand up the next day!
Similarly, if you study his life, you’ll know he took so much risk in his early life! Because when you’re young, your risk-taking capacity is quite higher, because you don’t have many responsibilities and pressure!
Here, if you fail, you can start again from zero! But if you don’t take risks at a young age, In the future, you will regret the fact that you never took a risk, more than failing by taking a risk!
There is a book related to it, and it’s told in that book, ‘one of the biggest regrets they feel on the deathbed is that they didn’t live their life according to their own.
They didn’t do what they wanted, didn’t take that risk which they could take! Maximum people don’t understand this!
And understand it in their life’s last moments! Rakesh Ji had understood this thing early! By following a passion, he also took risks! And you also can do this!
2. Have an Independent Mindset
In 1989, Madhu Danadavte, our finance minister, was about to present the budget. Many gurus predicted that this budget would be bad for investors and businesses.
And due to this prediction, many people were selling their investments. Its hype had spread so much in the market that it crashed before the budget!
In this situation, any normal investor would have sold his investments!
But Rakesh Ji didn’t do this! He showed an independent mindset! And this is lesson no. 2. Instead of being in the hype, he researched a lot about the finance minister!
He came to know Madhu Ji is also from a financial background! So, he will keep the budget investor and business-friendly!
After understanding this, Rakesh Ji invested more money instead of selling shares! There is also an interesting story of that time!
He recalls that his wife did not ask him for anything then. Never used to put demands! But the first time, she put a little demand!
She said we should have AC in their bedroom! At that time, Rakesh Ji has two crore rupees! And had invested the whole amount in the stock market!
When that budget was released, everything happened according to his research! The budget was in favor of investments and business.
Due to this, his net worth of 2 crores increased to 20 crores. And then he got AC for his wife!
The interesting lesson here is that he had a lot of money at that time, two crores. According to that time, two crores is too much for today’s time!
But still, he earned profit first and then purchased AC. But nowadays, when people earn even 2 lakh rupees, they purchase cars, purchase phones on EMI, and spend a lot.
But Rakesh Ji was not like this! Instead of liabilities, he used to focus on assets, which you also should do!
And one more lesson is Rakesh Ji used to focus on diversification! Portfolio diversification! This means investing in different things!
You can also do the same thing! If you want, you also can diversify your portfolio! Instead of Indian stocks, you can also trade in US stocks! Like, Google, Amazon, Apple, and Microsoft! By investing in those companies, you can diversify your portfolio!
The condition of the US stock market is bad for now! Because of the correction, the tech companies’ stocks are available at low prices!
So, this is also a good opportunity to buy stocks in those companies which you trust! You know for sure that their price will go up in the future!
You can use INDmoney, if you are interested in investing in US Stocks, and if you use referral code you can get up to 1000rs of shares for free.
So, this is one of the best times to invest in US stocks.
3. Look For Opportunities
A good investor can recognize the right opportunity! Warren Buffet invested in American Express, which was caught in an oil scandal!
Due to this, he lost a lot of money! In COVID in march 2020, the first lockdown was imposed when the price of all companies was falling sharply; the stock of Tata Motors crashed badly at that time!
Its price had fallen by Rs.65! It was so low that it didn’t happen in the last 12 years! It was a good opportunity for Rakesh Ji.
He told it many times in the news, but no one listened! He took action on this and also invested in this company! Why?
Because the fundamentals of this company were quite strong! Due to this, in just two years, it had reached 65, and its price had also touched 500 rs. And currently, it’s 421 rupees.
This means by investing at the right time; he earned 5-6 fold money! You can see! And this is lesson no. 3. Rakesh Ji doesn’t go with the crowd!
He understands opportunities, stands out, and invests in the right place! When most people were investing in FMCG & medical sector, Rakesh Ji picked a stock that no one was thinking about.
He didn’t do it blindly! He researched a lot about the company! He knew how well it had performed in the past!
How good its PE ratio is! Its price has been reduced just because of COVID. Similarly, you should also focus on opportunities and take action!
If you see his portfolio, you will know he has created the majority of his wealth from long-term investing!
He says, ‘95% wealth is created by being a bull‘. In the stock market, money can be earned by two methods.
The first method is to buy the stock cheaply and sell it high. As many people do! It is called being bullish in the market.
You can also call it bull strategy! The next method is short selling! You bet when the stock goes down! If you think that stock is going high, here you sell the stock at a high price!
And as soon as it goes low, you round it off by buying it! You can say bears do like this! In the Harshad Mehta scam of 2002, Rakes Ji earned a lot of money by short-selling!
There he noticed a lot of people were investing in the market. And there is something wrong here!
So, he sold all his stocks. And when the article was published by journalist Sucheta Dalaal, the market got crashed badly!
As soon as the market crashed, Rakesh purchased all those stocks again! And earned 30-35 crores profit!
Rakesh says, in this incident, that it was like a bonus! If you have to pull your life by investing, you should think long term, not playing such games.
In the year 2003, Rakes Ji made a similar investment! He had purchased 4.4 crore shares of Titan company when its stock price was just 3 rupees.
After some time, its prices went from 3 rs. to 80rs. And then came back to 30rs. At this time, many people get scared and sell their investments!
But Rakesh showed patience! He put the stocks on hold! And guess what… when the market started going up, the stock price also increased gradually!
And such a time came; he didn’t even need to sell the company’s stock! A small dividend fund from that company was used to cover all of his family’s expenses.
And this thing is very important to understand! Buying and forgetting stocks! Whether it is in profit or loss!
If you believe in your research, and understand the company’s fundamentals, that they are strong, then you can be financially free with just one stock.
And this is the lesson ‘think long term. I’d like you to comment on the fifth lesson you’ve learned from Rakesh Ji’s life, from his investments.