Rakesh Jhunjhunwala’s risk rule: ‘Mistakes will happen, but keep them within what you can afford’

Rakesh Jhunjhunwala distilled his approach to risk with a candid warning: “I am not afraid of making mistakes. But my mistakes were those that I could afford.

That's very important: mistakes will happen but you must ensure that you keep them within limits you can afford.” He made the remark during a high-profile conversation with actress Alia Bhatt in October 2017, around Diwali, as he discussed why risk-taking is essential for growth but should never be reckless.

The billionaire investor often returned to the same theme, saying, “Only make a mistake you can afford so that you may to make another one,” and, “I reserve the right to be wrong.” His strategy, he said, was to buy right, sit tight and hold companies for the long term rather than try to time the market perfectly.

Jhunjhunwala (1960–2022) was often referred to as the “Big Bull” of India or the “Indian Warren Buffett”. A qualified Chartered Accountant, he turned a modest ₹5,000 in 1985 into a multibillion-dollar portfolio. At the time of his passing in August 2022, his net worth was estimated at $5.80 billion, placing him among India’s richest individuals.

Shortly before his death, he co-founded Akasa Air, a low-cost Indian airline. His portfolio became synonymous with long-term “multibagger” bets, most notably Titan Company, where his early investment grew 400x over two decades.

Alongside his investing rules, he was a steadfast optimist about the country’s prospects, often saying, “The future of India is brighter than the sun.” He repeatedly stressed keeping losses within limits that do not compromise long-term financial stamina.