The Big Bull of Dalal Street: How Rakesh Jhunjhunwala made his fortune is a useful read for new investors

Rating: 4/5

Rakesh Jhunjhunwala left behind $5.8 million when he died suddenly in 2022. The chartered accountant-turned investor is a legend on India’s stock market, nick-named as The Big Bull of Dalal Street by traders and the media.

In a new book chronicling his story titled, The Big Bull of Dalal Street: How Rakesh Jhunjhunwala Made His Fortune, authors Neil Borate, Aparajita Sharma, and Aditya Kondawar bring a readable and informative portrait of this shrewd financial wizard. It also reads like a reference book for those starting out or wanting to learn more about investing in the stock market. 

The book has short, crisp, and article-like chapters. However, the authors didn’t get a chance to interview Jhunjhunwala, whose health was failing during the Covid-19 pandemic.

Despite not being able to interview the man personally, the authors have built a thorough and personalised portrait of Jhunjhunwala who began trading in stocks with money that he had borrowed from acquaintances and his brother's clients. His trading skills were razor sharp, and within just two years, he grew his investors' wealth exponentially. Jhunjhunwala began trading in the late eighties, but with the post liberalization era, he took trading positions that grew his money to incredible amounts. 

The book starts off with a personal portrait of a jolly and pleasant younger son of a Marwari family, and chronicles his traditional values and eternal love for his wife, Rekha. Together, they lived as a joint family and brought up two children while steadily building their personal wealth through stock market trades.

Rakesh loved to entertain and invite his friends over. He enjoyed the media spotlight on his Midas touch, but never over reached. Perhaps the fact that he has consistently stayed bullish on the Indian stock market (except for a doubtful phase at the onset of the pandemic) made him a reference point for business journalists. His interviews present a witty, instinctive, and brave investor, who could steer market interest to his advantage but never crossed a line on manipulation.

This book studies the source of his wealth through three of his most successful, and large-scale investments–Titan, Crisil, and Lupin. It also focuses on those trades that he didn’t succeed with–DHFL, A2Z Infrastructure, and Mandhana Retail Ventures. Jhunjhunwala’s instincts failed him in these cases, and with DHFL, he just got a little reckless. But losing money never broke his spirit, although, amusingly, he was known to break knick knacks and TVs in his office when he did lose a chunk. 

Each chapter analyses his major stock investments as an individual case study, becoming a little dense for the common person.

Coupled with analysis of his behaviour and signature methods of buying or selling stocks, the author establish that Jhunjhunwala depended primarily on his instincts. He also researched company reports, updates, and relevant information, but that didn't always guide his choices. He would also often advise people not to follow his style of highly-leveraged holding positions.

His approach to investments is not easy to replicate. He bet on volatile small cap shares, waiting for them to grow and holding on to them for long periods. He kept a sharp eye out on valuations of companies and almost always followed major P&L and management related updates. He was sceptical of new-age companies and their value, for instance, Flipkart. His point of view proved prophetic, given that each new-age venture stock has led to investors losing money in recent years (Nykaa, Paytm, and Zomato). 

Rakesh Jhunjhunwala is the most recognised and successful stock market investor whose fortunes coincide with the sunshine years of Dalal Street. The situation on the ground has altered a lot today. But, with career stagnancy, professional dissatisfaction, and job losses mounting in a fast changing, bewildering labour market, making money on the stock market is a tempting option. This book helps learn the basics--especially in the final chapter that gives an overview of his investment tips. It is also a quick read about a quirky Indian who made a difference to our economy post liberalisation.