#3 Sanjay Bakshi: Why Mental Models

Multidisciplinary thinking serves as a foundational framework for both investment analysis and life decisions, enabling a deeper understanding of complex problems by synthesizing insights from diverse fields like psychology and economics. Sanjay Bakshi, a professor of value investing, emphasizes the necessity of moving beyond surface-level data to identify durable competitive advantages, or "moats," which often remain invisible in short-term quarterly results. By adopting a "part of the reason" mental model, decision-makers can mitigate cognitive biases like the availability heuristic and foster open-mindedness. Furthermore, cultivating an environment that minimizes noise—such as removing television or stock tickers—allows for the long-term perspective required to recognize true business quality. Successful business models, exemplified by Costco, prioritize pro-social value creation and deserved trust over short-term profit maximization, demonstrating that ethical, sustainable practices often yield superior long-term results.