We were researching the success secrets of the most well-known investors and we came across a very interesting article published in November 2015 in the Livemint newspaper. The story was on the long-term performance of Rakesh Jhunjhunwala (RJ), the flag bearer of the Indian Investment Gurus. The article had done a study on RJ’s investments and showed how his portfolio had done. He had some very big winners, some average performers and even some losers. They also published his top 10 holdings, which had been held for at least one year, at that time. See below…

Our immediate thought was what if we replicated this portfolio, and called it “RJ Top 10”, on the day the article was published how would the portfolio have done. The results were more interesting than we had imagined

First the results:

1. The BSE Sensex has gone up by 31% in these two years, the RJ top 10 Portfolio has gone up by 70.00% comprehensively beating the Sensex.
2. What is very intriguing is that of the top 4 stocks, Lupin, Crisil and Aurobindo Pharma have given negative returns! Lupin is down more than half.
3. Escorts, Delta, Dewan Housing and of course, Titan have been the big gainers.

If we had invested in one RJ stock say, Escorts or Titan, we would have been LUCKY and be smiling now. If on the other hand we could have been UNLUCKY and invested in another pick by the legendary RJ, Lupin!

But then we are not in the market to play the game of LUCK. We are in the market to Invest and grow our savings. We anyways have to deal with the Market Risk and volatility. Why add the risk of our Luck? Even someone as smart as RJ can have a bad pick/ bad luck.

The biggest Takeaway from this we believe is that if you want to test your luck buy a Stock. If you want to Invest buy a Portfolio. We at Marketsmojo strongly advocate a portfolio approach to investing.