Sanjay Bakshi (@Sanjay__Bakshi) is a behavioural finance, business valuation professor and venture capitalist. He’s a great thinker and a very successful investor.
I spent some time summarising his teachings on mental models, multidisciplinary thinking and decision making.
Reduce bias with multidisciplinary thinking.
Multidisciplinary thinking considers complex problems from multiple perspectives and specialisms.
Combining a multidisciplinary approach with first principle thinking reduces biases, and identifies superior solutions to problems.
Multidisciplinary thinking crosses disciplines.
“Economics is based on the notion that humans are rational. Social psychology is based on the notion that humans are not rational.”
Economics and psychology are incomplete without each other. A team of both will be superior.
The best solutions are found by asking why?
“When evaluating something, you should always ask yourself why? Why did something happen? Why did it happen the way it did? Why?”
Asking why takes you to first principles. You better understand the problem you’re trying to solve.
There is no one right answer.
Sanjay gets in the habit of starting sentences with “part of the reason” to acknowledge that there are often multiple solutions to complex problems.
It clarifies his thinking, reducing potential biases and the freedom to accept he may be wrong.
Multidisciplinary thinking applies to everything.
"It’s wrong to assume that the idea of multidisciplinary should be applied only to investing. Investing should merely be an excuse."
A multidisciplinary approach encourages diversity of thought, resulting in better outcomes.
Focus on what really matters.
“While making decisions, you need to shut out the noise and focus on what really matters. What matters is far fewer than initially appears as such.”
Gain better clarity by cutting out noise and reducing the number of decisions you’re making.
The power of the physical environment.
Organise your physical environment to encourage rationality and better decision making. He's thrown out his TV, helping to cut out distractions.
He aspires to have a room without electronics or distractions. A space to sit and think.
Making mistakes shows that you’re creative.
The best decision makers reduce (but do not eliminate) errors. They’re prepared to experiment and make the occasional mistake.
It means they innovating and thinking creatively. It’s their framework for creating unique insights.
Commitment to learning.
They’re not doomed by mistakes. “They made mistakes, learned and never made those mistakes again”
Sanjay reads “Poor Charlie's Almanack” by Charlie Munger (@CharlieBot) 3-4 times a year. He learns something new each time, shaping the way he thinks. It’s made him a better decision maker and investor.
He’s currently reading “Pebbles of Perception”.
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