We will learn about the guru of India’s most successful investor “Shri Rakesh Jhunjhunwala” and the millionaire “Shri Radhakishan Damani”.
Before investing in the stock market, Radhakishan Damani was in the business of ball bearings. In the early days he made money by trading and investing in MNC company. In the 1990’s, when Harshad Mehta was manipulating the shares of some companies, he made a profit by short selling. For those of you who don’t know what short selling is, I’ll give you a brief overview. When trading stocks we buy and sell first shares but in short selling the opposite is true in short selling the first shares are sold and then they are bought.
When a trader thinks that the shares of a company are going to go down, that trader does SHORT SELLING in it. We will see more information about short selling in the next blog.
In Harshad Mehta’s blog, we saw that Harshad used to take money from the bank and manipulate the share price in an illegal manner. He raised the shares of ACC from Rs 200 to Rs 9,000. Took up. Although the FUNDAMENTAL of this ACC company was not good, the prices of this company were increasing. All these circumstances came as a surprise to Radhakishan Damani. They know that Harshad Mehta is manipulating the shares of these companies and these shares will not last at such a high price and as Harshad Mehta’s funds run out, the price of these shares will go down. Damani Sir was short selling the shares which Harshad was mishandling. But Mr. Damani did not know about Harshad’s fund, so he had no idea where all the funds were coming from. Harshad was buying shares and Damani Sir was short selling shares. Damani was also losing a lot but when the “Harshad Mehta scam” was exposed, those shares fell a lot and Damani made a lot of profit.
After two-three years, VALUE INVESTOR “Chandrakant Sampat” had achieved a lot of success by studying value investing. Taking his inspiration, Radhakishan Damani studied and turned his attention to long term investment. Damani Sir used to find good fundamentals and buy the shares at a very low price and keep them HOLD for a long time. Radhakishan Damani has made a profit by investing for a long time but he also trades when he gets a small opportunity. Daman had made good profits by short selling even when Ketan Parekh had scammed him in 2000-2001 and the price of some shares was going up illegally.
Radhakishan Damani bought VST Industries in 2000 for Rs 85 and today it is priced at over Rs 3,000. HDFC Bank, GATI, BLUE DART, SUNDARAM FINANCE, GILLETTE, INDIA CEMENT etc. He has made a lot of money in shares. Damani Sir believes in long term investment and he invests for 5 to 10 years. Damani Sir was very interested in CONSUMER BUSINESS and also invested in that industry business. Before starting Dmart, he had taken the franchise of “Aapna Bazar” at Nerul, Navi Mumbai. In that business, he got to learn a lot about the retail business. In 2002, he founded the Dmart supermarket. “Be it business or investment, Damani Sir is thinking of investing for a long time.” Damani Sir took advantage of the fact that real estate prices had come down a lot in 2001-2002. He started buying properties in different places for Dmart. He bought some property at that time in Thane and Navi Mumbai because the property rates there were very low. They bought it for the reason that if Thane and Navi Mumbai develop in the next few years, the acquired property will come to the forefront and its rates will also increase. Damani Sir’s long-term investment vision proved to be very beneficial for Dmart. There is no branch of Dmart in the mall, their shops are their own. He never thinks about what people will say about Damani using his own philosophy in both business and investment. When all the retailers were behind in expanding their business, Damani Sir followed the path of his philosophy and focused on its profit without expanding Dmart and then started expanding Dmart. Dmart had only 30 shops till 2011 and then in 5 to 6 years they started more than 100 shops. When the trend of e-commerce started, the retail business experts were asking them to go into e-commerce but Damani focused on the branch and focused on making it better and the result is in front of you. Dmart is today the most profitable retail business in India. When Damani Sir was a major shareholder of HDFC Bank in 1995, some investors asked him why there are so many banking stocks available in the market at very low prices, why are you investing in HDFC Bank? When his share price rose a few years later, those investors got the answer to his question. Radhakishan Damani has no college degree. He dropped out of Mumbai University after his first year of B.com. He is one of the most successful investors and entrepreneurs in India even though he has no degree. Damani showed that it is more important to be determined than to be educated. Damani Sir also admits his mistakes like the rest of the investors. He also learned how to be an ideal business by studying the company and the shares. It is the job of stock market investors to find shares that have good business, but Radhakishan Damani has done a good business along with finding good shares. “I’ve learned a lot from investing in my life,” he says. Rakesh Jhunjhunwala says, “If my father and Radhakishan Damani had not guided me, I would not have succeeded today.”
Rakesh Jhunjhunwala and Damani Sir have invested heavily in APTECH Ltd, CRISIL Ltd. Radhakishan Damani lives a very simple life. He always wears a white shirt and white pants.
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