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Reimagining Investing: Lessons from Evolutionary Theory. My summary of “What I Learned About Investing from Darwin”
In the ever-changing world of investing, finding a sustainable and successful approach can be challenging. However, Pulak Prasad, an equity fund manager and founder of Nalanda Capital, presents a compelling alternative in his book “What I Learned About Investing from Darwin”
Inspired by principles from evolutionary theory, Prasad’s investment philosophy revolves around being permanent owners of high-quality businesses and minimizing risks before maximizing returns.
We’ll explore the key lessons from Prasad’s book and how they can reshape the way we approach long-term investing.
Avoiding Big Risks
Just like living organisms prioritize survival, businesses should do the same. Prasad’s team at Nalanda Capital understands the importance of minimizing risks before maximizing returns. They meticulously avoid investing in companies with high debt, unaligned owners, fast-changing industries, or those prone to turnarounds.
By becoming “better rejectors” they forgo potentially attractive opportunities if the risk of capital loss is high. Although this approach may occasionally mean passing on some investments, Nalanda prioritizes the preservation…
