What Was Rakesh Jhunjhunwala's 'Superpower'? Devina Mehra Reveals Big Bull's Key Investing Lesson

Recalling the late Rakesh Jhunjhunwala—the Big Bull of Indian stock market, India Inc expert Devina Mehra shared the key investment principle that made the legendary investor a class apart from the rest.

Posting on 'X' (formerly Twitter), Mehra pointed out a common mistake most investors make and how they often chase the wrong metrics, mistaking luck and timing with a consistent strategy.

Mehra, Founder and Chairperson of First Global, argued that the perceived superpower of investors like Rakesh Jhunjhunwala wasn't stockpicking or finding the right winners at the right time. "What was Rakesh Jhunjhunwala's superpower? No. It wasn't stock-picking," Mehra posted on 'X'.

She went on to suggest how adherence to a fundamental principle such as staying continuously invested in the equity markets, was key to Jhunjhunwala's success. Mehra went on to criticise the common retail investor's tendency to chase recent winners and always being reactionary in the market, in the context of geographical performance.

For instance, if the Indian market delivered muted returns in the last period, and US funds performed strongly, shifting capital to the US fund based purely on last period's performance is a sure-shot way to underperform. The previous period often shows the reverse—a time when Indian markets outperformed.

"Think you should buy a US fund because last samvat was a nothing one for Indian markets In 2022, it was the other way around. Chasing last period winners is a sure shot way to underperform or operate," she added.

A key to Jhunjhunwala's investment philosophy, therefore, was to distinguish between smart money and dumb money, she said. Smart money recognizes that markets rotate and that performance cycles do not repeat immediately. Dumb money, on the other hand, is driven by the fear of missing out on the last period’s rally.