The GKPI Philosophy
Grant–Kurtén Principle of Investing
Pulak Prasad of Nalanda Capital borrows from biology to explain how we should behave as long-term investors. Scientists observed that in nature, evolution looks fast when measured over short spans but slow when viewed over centuries. Beak sizes of finches, teeth of brown bears - measured year to year, they look like they’re always changing; measured over millennia, they hardly change at all.
Pulak applied this fractal truth to business:
In the short term, companies look volatile. Quarterly earnings swing, headlines scare, currencies wobble, industries panic.
But in the long term, the truly exceptional businesses hardly change at all. Their character endures: they keep growing share, keep compounding, keep widening the moat
From this came GKPI:
When you find a high-quality business that does not fundamentally alter its character over decades, use short-term noise only to buy, never to sell.
What GKPI Requires
High-quality businesses only – honest managers, stable industries, stellar operating records, defensible moats, rising market share, little debt.
Patience – ignore short-term turbulence; it’s just evolutionary noise.
Laziness of the right kind – GKPI “demands that we be lazy when buying, and very lazy when selling." No CNBC, no daily ticker-watching, no reacting to news.
Selling only for decay – not because valuation is high, but only if governance rots, capital allocation goes wrong, or the business suffers irreparable damage.
Why it Matters
If you had applied GKPI to L’Oréal - ignoring every short-term scare from 2009 to 2022 - you would have done nothing and turned $60 into $329, a 450% gain versus just 80% for the French CAC 40 index.
Think about what happened in those years:
The Eurozone crisis threatened to unravel the currency.
The Brexit vote shocked Europe.
The pandemic shut down economies overnight.
Inflation and interest rate scares came and went.
Each episode created panic. Each one felt existential in the moment. And yet, through it all, L’Oréal continued to do what it has done for over a century - build brands, grow distribution, and deepen its moat. To the impatient eye, the business looked volatile. To the GKPI lens, nothing fundamental changed.
That is the power of Pulak’s philosophy:
GKPI is not about activity. It is about refusing to be seduced by the daily drama of markets.
GKPI is about faith in the slow, enduring march of great businesses - those rare organisms that compound value through thick and thin.
And above all, GKPI is about discipline - the willingness to let short-term “evolution” play itself out without reacting.
In nature, species appear to change rapidly when viewed year-to-year, but across millennia their essence remains stable. The same is true of great companies. L’Oréal in 2009 and L’Oréal in 2022 looked different in the headlines, but to a patient owner, it was the same compounding machine - just 5× more valuable.
GKPI is not about activity. It’s about faith in the slow, enduring march of great businesses, and the discipline to let short-term “evolution” play itself out without reacting.
TL;DR
Pulak’s GKPI says that like evolution, businesses look volatile up close but are steady over decades. So with great companies, we use short-term turbulence only as a chance to buy, never to sell.
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