Why FY12 is Jhunjhunwala's worst financial year

The bull of Dalal Street Rakesh Jhunjhunwala , who is also referred to as the Warren Buffet of India, said in an exclusive interview with CNBC-TV 18 that in spite of the sudden strength in the market, financial year 2012 has been the worst trading year for him.

I got my calls right, but my trading wrong

When asked why, he said “I got all my calls right and all my tradings wrong. It happens, it is life. You have to take it, accept it with a smile.”

Market reacting positvely to negative news

But what confuses him the most is the market’s reaction. " Markets are showing strength. They are reacting positively to negative news… And that makes me cautious or confused," said billionaire investor Jhunjhunwala.

He added that one still has to wait for events to unfold in the global economy, but unfortunately he does not see any upside in the western world till mid-June. However, he is confident that neither Greece nor Italy and Spain will default. But domestically the most concerning factor, he says, is inflation.

“I am not so sure that inflation will come down. The Reserve Bank is not only looking at the inflation, it is also looking at the heavy commodity prices,” said Jhunjhunwala. He added that even though people are aware of the problem, there is no unanimity on the solution.

No commitment to market today

Explaining the poor sentiment in the market Jhunjhunwala said 2008 was an end of a 20-year old bull market in all asset classes and the end of a six-year bull market in India. Commitment was wide, and people had lost a lot of money. But today, he saus, the public has not participated aggressively. “So, for markets to really take a deep dip, you will have to have a big rise and a plethora of commitments. So, I think 4,700, in all probability, will be protected.”

There is underexposure to equity in India

Another problem that he highlighted was the underexposure to equity. “In India, everybody thinks that jewellery and real estate is wealth, stocks are paper. Unfortunately, all my wealth is in paper.”

Watch the entire interview below: