We loved making this episode because it's part Darwin evolutionary biology and part Buffett investing wisdom! In the book, Pulak Prasad shares how he has built his investment philosophy based on evolutionary survival, and how many lessons surprisingly cross over into the finance world. His approach may seem simple, but it is effective:
1) Avoid Big Risks
2) Buy High Quality at a Fair Price
3) Don't Be Lazy - be very lazy
He's used this strategy to grow his investment firm, Nalanda, into a $5 billion fund, practicing what he preaches on a daily basis. But his book differs greatly from most investment books, because he incorporates examples across evolutionary science, such as deers in the wilderness, taming wild foxes, growing rabbit populations, and much more. These stories serve as a powerful connection to investing because they teach us how businesses can structure themselves to survive the long haul, how investors can overcome their natural FOMO instincts, and how compounding can creep up on us unlike anything we've ever seen before. I think this episode will be informative for investors, operators, and all science nuts alike. We hope you enjoy it!!
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What I Learned About Investing From Darwin - Pulak Prasad
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Recommendation of the Week: Dakshana Foundation
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The Web of Ideas: What I Learned About Investing From Darwin (my notes on the book)
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Show Notes:
3:04 - Avoid Big Risks: would you bet your life on your next investment?
12:22 - Buy high quality at a fair price
20:37 - What rats and antifragile businesses have in common
28:13 - Using the past to assess the future
38:31 - Don't be lazy... be very lazy
45:48 - What we mistake when we talk about compounding