According to Basu, with these two numbers, the compounded annual growth rate or CAGR for Rakesh works out to be either 62 per cent or 65 per cent—eye-popping numbers by any yardstick. In the long run, the return for the stock market as a whole is typically assumed to be just 12 per cent. As per Basu, Rakesh’s returns make him the most successful investor in the history of investing, bar one—Jim Simmons of Renaissance Technologies, who notched up 66 per cent CAGR between 1988 and 2018, and ahead of the likes of George Soros, Stanley Druckenmiller and Warren Buffett. Ramesh Damani feels that this sort of record simply cannot be replicated. “I’ve known Rakesh from 1988 to August 14, 2022. He compounded his wealth at 54 per cent over this period. In dollar terms, it is 47 per cent or something. So my feeling is that there’s some records that stand the test of time. For example, Don Bradman’s batting average,” Damani said.

To compare his portfolio’s performance with the Sensex, in 1986, the benchmark Sensex was at 561 points. At the time of Rakesh Jhunjhunwala’s death, it was 59,842. This is a growth of 106 times. If we were to work out the return rate for the Sensex, it would be 13.8 per cent CAGR. This nowhere matches Rakesh’s CAGR, going from R5000 to R35,000 crore. Returns alone did not build Rakesh’s fortune. He took on highly risky leveraged bets (borrowing) early in his career and this allowed his personal return to vastly exceed that of the Sensex. However, this was not all smooth sailing. In an interview with Ramesh Damani in 2011, Rakesh said that his trading profits came in fits and starts—getting supercharged in bull markets such as 2002– 07 and 2014 onwards. However, there were periods, such as 1993 to 1999, when he did not make much money from trading. He had an almost superhuman patience with such periods. In an interview with Shekhar Gupta at ThePrint in 2021, he gave the example of his patience with shares in Hindustan Unilever (HUL). “In 2001, at the index of 2900, HUL was at 327. Hindustan Unilever did not exceed that price for eleven years. Index went from 2900 to 22,000. Lever exceeded that price only in 2012. For eleven years, you had no returns except dividends. That’s because in the preceding period, Lever had already run up,” he said.  

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His patience was legendary, something he often emphasised in his public interactions, and this was focused on company fundamentals rather than stock prices. “As long as your company is gathering earnings, PE can come in three months. Earnings cannot come in three months. There was no growth in the corporate sector in the stock market between 1999 and 2003. Once the markets started moving up, you got the PEs in just six months. As long as earnings are coming, have patience...,” he told students at a lecture at FLAME University. 

An unwarranted crash in a stock never bothered him. His Delhi-based stockbroker friend shares an interesting incident. When Britain voted to exit the European Union (popularly known as Brexit) in June 2016, it sent shockwaves across global markets. “Bhaiya expected otherwise. He didn’t think Brexit would happen. The verdict came out early in the morning. He told me that before he went to sleep, he instructed Rekha to not wake him. He must have made losses, but he reacted calmly and acted on it later in the day when the Brexit carnage on D-Street settled.” 

A former employee, who didn’t wish to be named, shared an interesting story. “The pharma company was going through political turmoil, an issue unrelated to financial matters. The stock crashed, reacting to the news. Bhaiya had heavy stakes in it. He called us to ask about its fundamentals. We told him that numbers were strong. There was absolutely no financial risk to the company. He knew the stock had fallen more than it deserved. In a split second, he called his dealer and added more positions. After three to four days, a clarification was issued in connection with the political trouble in the company and the stock zoomed. Bhaiya made a lot of money and held on to its positions for the long term,” the ex-employee said.

Excerpted with permission from The Big Bull of Dalal Street: How Rakesh Jhunjhunwala Made His Fortune by Neil Borate, Aprajita Sharma and Aditya Kondawar, Penguin Random House India