What I Learned About Investing from Darwin

The investment profession is in a state of crisis. The vast majority of equity fund managers are unable to beat the market over the long term, which has led to massive outflows from active funds to passive funds. Where should investors turn in search of a new approach? Pulak Prasad offers a philosophy of patient long-term investing based on an unexpected source: evolutionary biology. He draws key lessons from core Darwinian concepts, mixing vivid examples from the natural world with compelling stories of good and bad investing decisions—including his own. How can bumblebees’ survival strategies help us accept that we might miss out on Tesla? What does an experiment in breeding tame foxes reveal about the traits of successful businesses? Why might a small frog’s mimicry of the croak of a larger rival shed light on the signs of corporate dishonesty? Informed by successful evolutionary strategies, Prasad outlines his counterintuitive principles for long-term gain. He provides three mantras of investing: Avoid big risks; buy high quality at a fair price; and don’t be lazy—be very lazy. Prasad makes a persuasive case for a strategy that rules out the vast majority of investment opportunities and advocates permanently owning high-quality businesses. Combining punchy prose and practical insight, What I Learned About Investing from Darwin reveals why evolutionary biology can help fund managers become better at their craft.

Table of Contents:
Acknowledgments Introduction Part I. Avoid Big Risks 1. Oh, to Be a Bumblebee Part II. Buy High Quality at a Fair Price 2. The Siberian Solution 3. The Paradox of McKinsey and Sea Urchins 4. The Perils of a Pavlovian 5. Darwin Ate My DCF 6. Bacteria and Business Replay the Tape 7. Don’t Confuse a Green Frog for a Guppy Part III. Don’t Be Lazy—Be Very Lazy 8. Birds and Bears Bare an Aberration 9. Eldredge and Gould Dredge Up Investing Gold 10. Where Are the Rabbits? Conclusion Notes Index

About the Author :
Pulak Prasad is the founder of Nalanda Capital, a Singapore-based firm that invests in listed Indian equities and manages about $5 billion. He was previously the cohead of India for Warburg Pincus, a global private equity firm, and worked at the management consulting firm McKinsey for several years.

Review :
In his wonderfully original and insightful book, Prasad makes a compelling case for the science of evolutionary biology informing the art of investing. From red deer and silver foxes to green frogs and dung beetles, he draws upon the work of Darwin and others to colorfully articulate many of the investment principles that have driven his remarkable success. I had the privilege of working with Pulak for nearly a decade. There are great investors and great minds: Pulak was always an unusual combination of both. His book brings both of those elements together—an architecture of investing that he has practiced for decades with great success—but constructed in an unusual way by comparison to phenomena in the natural world of evolutionary biology. The result is a fascinating and highly enjoyable experience that reminds us of the often simple answers to complex questions. Pulak Prasad is proof of Charlie Munger’s adage that great investors thrive on multidisciplinary thinking. He has written a highly enjoyable and thought-provoking book that is a master class on both investing and evolution. What I Learned About Investing from Darwin conveys important lessons and concepts for those interested in disciplined, long-term investment. Prasad's writing is engaging, charming, and stimulating. Star asset manager and founder of Nalanda Capital, a Singapore-based firm, Pulak Prasad has written a timely and practical guide. He uses a folksy style like Warren Buffett’s to relate each point to real-world examples, often from his own portfolio at Nalanda Capital. Doing so helps the narrative flow, which is much better than in many textbooks — another reason for investment professionals to pick up the book.