The common symbols of investments are common across all investment related communications such as advertisements, billboards, videos, etc.? In fact when you think about it, you would mostly be watching a sapling or a banyan tree, right? The reason these symbols are used so often and so commonly is to convey the simple fact about investing that is an investment is a long-term affair.
The simple interpretation you can draw from such symbols is that if you invest regularly your sapling of investment will turn into a banyan tree. While it sounds practical and is logically sound, the fact that most people usually undermine and in most cases completely ignore is – the actual time it would take for your sapling to grow into a banyan tree.
In order to get the ultimate profits on your investment you have to give it sufficient amount of time to grow, hence only long-term investments have the true potential to generate huge profits and create enormous wealth for you.
Let’s take a look at one such famous investor who has cracked the success code. Let us analyse the way he went about investing, waiting and preparing for his master-strokes. In the Indian subcontinent, he’s popularly called as the Warren Buffett of India, he’s none other than Rakesh Jhunjhunwala.
There is a reason why people call Rakesh Jhunjhunwala the “Big Bull”. His investment philosophy has an uncanny similarity to that of Warren Buffett. In fact such his authority on the subject that ‘Rakesh Jhunjhunwala stock tip’ is one of the highest searched keywords on Google by Indians.
To his credit, Rakesh Jhunjhunwala has over the years identified numerous multi-bagger stocks which speak a lot about his astuteness and vision of identifying such stocks. But that one stock which elevates Rakesh Jhunjhunwala’s portfolio to an all new level is – Titan, a watch and jewellery manufacturing company.
The Hold It Long Philosophy:
Rakesh Jhunjhunwala bought 6 crore shares of Titan in FY2002-03. He bought the stock at an average price of Rs.3 apiece. The share price of Titan is currently trading at Rs.888 which has swelled Jhunjhunwala’s investment value in Titan more than a few thousand crores easily. This stock has been the shining jewel of Rakesh Jhunjhunwala’s holdings for more than 15 years. In April 2015, Jhunjhunwala sold 1.48 per cent out of his 6.94 per cent stake in the company. Click here to read more on Rakesh Jhunjhunwala.
Warren Buffett – World’s Most Successful Long-Term Investor
Whenever you think of the term value investing, the one person who immediately pops into mind is – Warren Buffett. His command on matters of investment is such that he rarely ever makes a mistake.
Considered to be one of his smartest investment – Freddie Mac is a mortgage insurance firm backed by the United States government. With a lot of conviction Buffett entered Freddie Mac in 1988 with an investment of $108 million. At the time the stock was at $4 apiece. Buffet exited the stock after holding on the stock for 10 years, by which time the company’s stock prices had touched $70. While identifying and entering the stock shows his brilliance, it only half the story.
The way in which he exited this stock is more telling of his style of investing. Buffett arranged for several meetings with the CEO of Freddie Mac in 2000. During the course of these meetings, he sensed that the CEO’s plans for the future were not in the best interest of the company.
Within a year, he dumped his entire stake in Freddie Mac. Lo and behold, Warren’s prophecy came true. In 2003 it was found that Freddie Mac had been misreporting its earnings on a regular basis. The CEO was immediately ousted. In fact during the 2008 financial crisis, Freddie Mac got into so much trouble that the US government had to bail the company out.
This entire trade is what easily defines the man’s master stroke.
