Jhunjhunwala’s investments are followed very keenly by institutional and retail investors, alike. While some follow him blindly, an online stock advisory firm Niveza uses his picture to advise investors on stocks, which are allegedly picked on the basis of his strategy. So what is his stock-picking mantra? Jhunjhunwala says, he looks at growth, valuation, liquidity, and the company’s cash flows. “I pay a price for picking the wrong companies too. When I buy companies, I am adopting them. If they don’t deliver, then I have made a mistake in choosing them. It is true that some companies approach me, which I assess. Others, I choose.” Some of his friends claim that when he believes in a story, he backs his conviction with large sums of money. For instance, he owned substantial stakes in Bata and McDowells because of the size of the opportunity. He has since exited these stocks, and not with very substantial gains. Time, he claims, has taught him not to be dogmatic. “Not being dogmatic has
helped me become a better stock-picker. You have to accommodate others’ point of view,” he adds. His friend Kalpraj Dharamshi says, that he always takes contrarian calls, because that is where the opportunity lies. If a stock has been discovered by the market, then the valuation will reflect that.