Tales from the Big Bull: Utpal Sheth on what he learned from Rakesh Jhunjhunwala

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Utpal Sheth, long-time associate and confidant of the late Rakesh Jhunjhunwala and founder of the Trust Group, shared some of the most telling stories and insights from his years with Jhunjhunwala—stories that capture not just investment thinking, but philosophy, temperament, and the art of patience in an exclusive conversation on the Wealth Formula Podcast with N Mahalakshmi. Here are the main takeaways from the conversation.

Finding the flywheel and the catalyst
One of the key traits Sheth points to is Rakesh Jhunjhunwala’s extraordinary ability to match long-term vision with disciplined entry pricing. “Rakeshji was a unique investor who could look at the terminal value and yet not lose sight of his entry price,” he said. “That combination was very powerful.”

Sheth said Jhunjhunwala was able to assess both the flywheel that drives long-term compounding and the immediate catalyst that sets that in motion. Referring to one of his best-known investments (Titan), he noted, “There were two businesses—watches and jewellery. One was loss making, one was profitable. But when he understood that the unit economics of the loss-making business had actually turned, then you knew that in due course this will work out. And you knew the scalability there was far greater than in the watches business.”
This ability, Sheth said, stemmed from he calls “differentiated insight”—a way of seeing what others didn’t. “Rakeshji used to be a genius at being able to identify and capture that differentiated insight in his mind,” Sheth said. “And once you have that insight, which allows you to understand that over the next 5, 10 years, things will play out favourably, that helps you build conviction.”

Calibrating exposure with conviction
What set Jhunjhunwala apart was not just conviction, but how he sized his bets as conviction evolved. “The first time he gets a differentiated insight, he will take some exposure. And as his conviction keeps going up and keeps getting validated, he will keep adding to those positions. In the past, he’s added at not just a few percentage points higher, but many multiples higher as well,” Sheth said.
This wasn’t governed by fixed rules or rigid models. “Let me quote Rakeshji here,” he added. “He used to say that investing is an act of wisdom and not intellect. So it’s not a mathematical formula that you keep the valuation constant or anything like that….”

Sheth described this style as “probabilistic portfolio management.” If the probability of the outcome improved and the terminal value seemed higher, the Big Bull wouldn’t hesitate to pay up. “The terminal value that we are discussing was never a DCF methodology,” Sheth clarified. “It was a nebulous figure and getting the direction right was far more important than getting the speed right.”

Mental models for valuation
Sheth shared an early memory from the mid-1990s when Rakesh Jhunjhunwala had bought into United Spirits and United Breweries. Sheth, too, was a strong believer in the businesses, but Jhunjhunwala’s framing of the investment was striking in its simplicity.
“He said, ‘Do you think that a 40% market share of India’s alcoholic beverages market should be available for ₹400-500 crore market cap?’ Such a simplistic and yet such a powerful way of thinking about it.”
He didn’t need spreadsheets. “He may not have had a specific number in mind. But he knew that the direction was right.”

Focused bets, not diversified doubts
One of Sheth’s own learnings came from a moment when he approached Jhunjhunwala with a concern. “Once I went to Rakeshji and I said, look, our percentage exposure to our largest holding—which is his most storied holding—has now crossed this number. Should we think of trimming?”
Jhunjhunwala’s response was both sharp and rooted in logic. “He said, is your conviction any lesser? If not, why? Do you have an alternative in mind, which is better than this? Then let us talk.”
That, Sheth said, was the essence of conviction-led sizing. “He had a laser-sharp focus on what I call probabilistic portfolio management, where his conviction used to get reflected in his portfolio weights.”

Patience when numbers don't show up
Even the best investments, Sheth said, go through periods of underperformance. It is here that Rakesh’s philosophy truly shone. “He used to say, your patience may be tested, but your conviction will be rewarded.”
But that didn’t mean blind faith. “You don’t maintain that conviction blindly,” Sheth explained. “You revisit your hypothesis, rebuild your conviction, and then maintain it. Rakeshji’s ability to sit through such periods of temporary underperformance on the numbers was immense. If he didn’t have that, he wouldn’t be the legendary investor that he was.”

Investing beyond the numbers
It wasn’t just about valuations and market caps. Jhunjhunwala had strong views on people and principles. “One of the things Rakesh would tell me is, we value people for who they are and not for what they have. Very simple, but yet profound.” His generosity wasn’t confined to people either—it extended to the way he did business. “He used to say, good business is a gain to you without a loss to me or a gain to me without a loss to you. He would always tell me to think win-win in whatever we did.” That kind of clarity, Sheth said, required not just intellect but grace. “Having that grace, having that larger heart was important.”
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