Book Review 2024.17: What I Learnt About Investing From Darwin, Pulak Prasad, 298 pages, Hardbound, 2023 -December 9, 2024
A sublime blend of Animal Planet, National Geography, and the CNBC, this book fuses the distinct expertise required in each one of these fields to make it an extremely insightful, readable, and engaging read on investment. The author’s personal investing experience adds a distinct color to the narration making it a practical lesson for anyone interested in equity markets.
The investment model described in this book is what the author has successfully practiced in Nalanda his investment firm for the last one and a half decade. The clarity of his model is seen in its simplicity and validated by not only his personal experience and experiences of other more renowned value investors like Warrant Buffet but deeply ingrained in the evolution of life on our planet, as vividly illustrated through numerous examples from the evolutionary research of the last one hundred and fifty years.
The narrative in this book is intertwined between detailed descriptions of specific evolutionary research studies and examples of individual investments from the author’s portfolio that reinforce the validity of the evolutionary principles in the world of investment. A commendable aspect of these narrations is in retaining the comprehensiveness of the core idea contained in the research studies and examples despite its brevity.
In its essence, the idea captured in the book is simple and easy to state, but like the mantra of getting fitness, is shown to be difficult to follow. At its core, the basics of investing are to pick a good business at a fair value and hold them “for ever”. Even these qualitative adjectives of good business and fair value is illustrated with quantitative filters used by the author of Return on Capital Employed and the Twelve-Month Trailing Price Earnings ratios. In practice, he demonstrates both statistically and using historical stock market returns, that it is more profitable to miss a good investment opportunity, rather than invest in a bad company. In determining good businesses, he demonstrates why looking at the past for explaining the current strong financial position is better than to base the present for painting a rosy future in making investment decisions.
This book is definitely not for the day traders, option traders, and speculators. For those investing their personal wealth, students of stock markets, and for long term fund managers, not reading this book is not a prudent option.
Happy Reading as we seek to secure our financial future.
