YouSaid · the spoken record

Sanjay Bakshi

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53

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2015-09-18

most recent

2015-09-18

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1

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podcast

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1. “Well, to pick up, I'm reading so many of them. Let me open up. I picked up one book which you had recommended a few weeks ago, which I find very useful. We just pulled that up. Babbles of Perception. A book that you wrote about in one of your posts and I picked it up and I'm reading that. That's a fabulous book. I've just read about 30% of it. I think it's a fabulous book.”

   2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

2. “I read it. I know there is audio version of the first talk. But I prefer to read it because it's so profound. I mean, you have to pause. If you are listening to it on audio, then I guess you need to constantly pause and think about it. Maybe you can do it, but I just don't find that very easy to do. So I'd rather read it and then let it be read a passage and then think about it. Maybe spend a few hours thinking about it.”

   2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

3. “I did about three times in a year, but some talks I end up reading more. Every year I go and teach a course on behavioral finance and on the talk on psychology human misjudgment is helpful because every time I read that talk I come up with new examples. I've learned something else over the last one year and every time I read that book that particular speech that he gave. It helps me come up with new associations, new examples and I think I'm a better thinker after having read what Charlie had said so many years ago and related to my new experiences and be able to teach them and in the process learn more through teaching so that's so some talks I would read more and some I would read less but I would pretty much read that book about three times in a year.”

   2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

4. “Heavily, they know that this bed is likely to pay off, and then if bets that are not paying off, they wouldn't hesitate to withdraw capital from those. I think there is in capitalism as investors, for us, we shouldn't have, at least I don't feel the need to have a preference of one or the other. If you can find both kinds of entrepreneurs, it's wonderful because you are trying to build a portfolio.”

   2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

5. “Would do that from a data driven perspective. There are these intuitive people out there in capitalism, you have found a Steve Jobs who can create something beautiful that people relate to and they become price insensitive. They just want what he is offering to the world out there and it is beautiful. But you can't spot these people at the beginning of their careers. You can spot them maybe in the middle of their careers. So there has to be past track record of somebody who is intuitive and right over and over again. Once you found that that's based on actual data. And on the other hand, you have these other kinds of entrepreneurs who are like Jeff Bezos who are data driven, who don't mind who have no idea about what will happen but who don't mind making a series of small bets on a number of hundreds of experiments and have the ability to be absolutely unbiased about where to put money and they would bet”

   2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

6. “Has to make good on his promise, he may have to pay a couple of billion dollars or even more than that. But the premium that he receives in return of that promise is several times more than the actual value of that bet. And the reason why he can do that is because nobody else is willing to make that bet. And the reason why nobody else is willing to make that bet is because of the point that you just made that people who have to make that bet have career issues. They have career risks.”

   2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

7. “So that's a great question, and I thought about that over the years, and over the years I've come across a few entrepreneurs which have, I think, been what I would describe as what Charlie would call as a learning machine. They made mistakes. They learned, and they haven't made those mistakes again. And, you know, as a financial analyst, I do know a few things about risk management. So the way I think about it is that I'm looking for businesses that are risk averse but not loss averse and those two things are very different. So what you're really looking for is somebody who doesn't mind making a few small bets. Many of them will go bad, but they have potential. And if they pay off, they'll pay big. And if none of them pay off, it won't impair the company, it won't impair the business. And that's exactly what how Buffett thinks. So when he is in a position to write an esoteric insurance policy, which will maybe pay off if”

   2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

8. “To experiment and sometimes make mistakes at the same time, when you are actually making big decisions, you need to also have a framework to reduce error. And I think Atul Gawande's work and the movement that he has created that you're referring to deals very well with that aspect. It doesn't deal at all with the idea that you want to be creative. So you need both. You need to have the ability to have unique insights and you also need to have the ability to reduce your error rate.”

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9. “So, when you think about checklists, I think what you're trying to do is to reduce your rate of error. And there's a trade-off here. I think what Atul Gawande has done is done a maless service to civilization by giving us a framework of how to reduce error. And it could be domain, it has to be domain specific. It could be flying a plane as he talks about in chapter 1 in that book. It could be about running a hospital operation. It could also be about running an investment operation. But all of that is focusing on how to reduce error. But that's just one aspect of it. Because reducing error is not always the most optimal thing to do. You also have to be creative. If you're going to be creative, you're going to make mistakes. If you look at any business which has been innovative, you'll find that they have made mistakes. So there are two things here. You need to have a framework to create insights, which means you need to have a creative mindset, which means that you should be willing.”

   2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

10. “He doesn't use the word loss aversion because loss aversion is a technical word, technical phrase, to illustrate a very powerful point that he makes, deprive a super reaction. I think when you read through his letters, whenever he's talked about deprival super reaction, it immediately hits you. And of course, Charlie has filed them away in his head by giving these descriptive names. And I find that very useful.”

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11. “Therefore, if you can notice change over a period of time by removing periods where change was not likely to be noticed, it's going to be very, very helpful. So I use that a lot. So in a sense, I like to look at a business 20 years ago, 15 years ago, 10 years ago, 5 years ago and today that helps me understand what competitive advantage could be and whether it is increasing or reducing over time. So it's useful to have these models, give them names which are very useful for recall because you can give a technical name to boiling frog. But I think it's very important to have these notions in your head because you can retrieve them very quickly once you have names which to specific models which you can recall immediately it will be very helpful. So I like that particular point that Charlie makes that you can give them your own name and he uses things like deprival super reaction.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

12. “Which deals with the low contrast effect, which talks about the idea that slow changes tend to go unnoticed, and that's a very powerful notion. If you think about it, because if you look at a business hugely value-creating business or a value-destroying business, and if you look at their financial statements over a quarterly period, you will miss a lot of the change. But if you put gaps in between, if you look at data five years ago and today, you will see huge change. And that tells you why you notice change, because you removed a lot of the columns, you removed a lot of the quarterly information. Charlie likes to give a name to models like this, a boiling frog syndrome, and I think we already know that there is this myth that if you put a frog in boiling hot water, it'll jump out and escape, but if you put a frog in lukewarm water and boil it slowly, it will stay there. And it's absolutely a myth. But I think the human equivalent of boiling frog is there in all of us.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

13. “Well, over a period of time when you experience something and you find answers to that questions that keep on occurring in a manner which provides you with answers which are different from what you thought earlier, then you might have chanced upon a new model. You never know for sure, of course, and it's just a way of organizing your thoughts. So you're trying to evaluate a situation and maybe five years ago you would have looked at it differently. Today you look at it differently because you read so many things and you have a better understanding of the world and maybe some answer to that question will help you figure out the problem better than five years earlier. Then I think this is a good reason to give a name to that and that's how I do go about doing that and Charlie has provided you with a framework. There are all these disciplines and there are all these names. He uses things like the boiling frog syndrome which is a model.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

14. “Yes, that's true. You know, in a sense, Amazon has picked up some of the best ideas of Costco. If you look at Amazon Prime, that takes money from customers upfront to give you certain privileges. That's an idea that I think they copied from Costco. But it has certain other advantages. It offers you amazing amount of availability, which Costco doesn't. So it kind of gives you and it has one shop. It doesn't have a lot of the costs which Costco has. So clearly, I think there is in capitalism, you'll keep on finding all kinds of businesses that are evolving over time. And I think the Amazon business model is very misunderstood, particularly people who think that they don't make any money. I don't think that I think Amazon makes money. You can't just go buy reported earnings. The true economic earnings of Amazon are significantly higher than reported earnings. I think it's a superior business model over time. But that doesn't have to mean”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

15. “Well, Costco, I think, makes about 20% return on equity, which is actually quite healthy. If you look at interest rates over this part of the world, and it has a PAT margin of less than 2%. So it has very high capital turns. And it can do that only because it has scale and it can get scale only because it has fewer SKUs. So I think it's a nice virtual circle. It's a nice positive feedback loop in play out there.”

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16. “And a business model which essentially involves making a fool of somebody in this case your customer, I don't think it's as admirable as a business model where everybody goes home happy.”

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17. “To society. I think there is something to be thought about on that. But I don't think, you know, there's a saying that there's a suck-up on every minute and there are all these people who believe that if they have become wealthy, then they need to have certain product, even though it is indistinguishable from something else which is far cheaper. And the supply of those people is actually going to increase over time. So I don't think we can say that those businesses are not going to thrive in the long run. They probably will. But to me that doesn't matter because I am much more in awe of businesses which do something pro-social for society and also make money for the stockholder. So there is no trade-off there. You're not really doing charity. You're doing something good and still make money. I think that's far better than a business where you're making a fool of somebody.”

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18. “You're right, but I don't think we can say this is short term or long term because clearly many of those brands have been around for a long time and they're very successful businesses. It's just that if you notice that you don't usually find a workshop halfway owning them why you know why don't they own any of that? Why do they have something which gives genuine happiness? Why do they own businesses which provide something which is genuinely useful?”

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19. “Prices because you're creating a perception in the minds of the consumer that this is worth a lot more than what it really is.”

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20. “$5,000 bags are really paying a price which is way more than the cost of manufacturing that bag. So you have huge gross margins in those businesses and they use their extra gross margin to advertise, to create a perception that you really do need that bag because if you don't have that bag, then your life is not full, it's not complete. You're incomplete without that bag. I don't think of that as a very admirable business model. I'm not being very judgmental here. I'm just saying things from my own perspective. That if you had a business where you have a low cost advantage where you're selling something that is really good and cheap and it has got a brand and it is creating a brand loyalty and you're selling it at a price which is a really low price and in the process you can still earn a high return on capital. I think of that as far more admirable business model than where you are selling at ridicule.”

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21. “To have consumers get 50 different kinds of catch, three or four are good enough. And when you have only three or four in a business which has scale, then you can offer them at a lower price because you are buying them in large quantities, much larger than other vendors who have 50 ketchups. So I think that's very admirable from a civilization's point of view. If you could have something that will be good for civilization, which means enough choice but not so much that creates a paradox of choice, at the same time you can earn a high return on capital and also pay your employees well, which is what Costco does. I think that's an extremely admirable combination of things that are happening over there. And when you combine that with the fact that customers are funding a lot of that business because they pay upfront.”

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22. “Would be a low cost provider if you think about it. The reason why brands are successful is because they give you scale and they give you a cost advantage. I think the low cost model is a far more sustainable model. It's actually a very admirable model in capitalism because there's less wastage. If you look at Costco, which we both know is a very admirable business model, then why is it an admirable business model? Because it deals with the paradox of choice. You don't need 50 ketchups. Why do you need 50 different kinds of ketchups? It's not good for civilization if you think from a Charlie Monger's perspective”

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23. “Advantage over a long period of time and how the business can scale. I think those are two or three things you have to focus on. And when you do that, a lot of things which are irrelevant which are available to you, you don't have to focus on them at all. You can remove them from your screen.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

24. “But it loses money eight months in a year, which means there are several quarters when it is loss making. And there is one big quarter when they make a lot of money. I think that's a very powerful way of thinking, that there are these businesses out there which are not going to do well and therefore if you put a lot of emphasis on short-term quarterly results, you are really looking at noise. And therefore, you should focus on what really matters. And if you focus on the idea of competitive advantage, the idea of what Buffett likes to call as a mot out there, then it's by definition a moat is not going to get eroded in a day. It's not going to get eroded in a quarter. So in effect, if you are focused on investing in a business which you think has a durable competitive advantage, then quarterly results are going to be almost insignificant. What really matters over there is the durability of that.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

25. “Yes, so depends on what context we are speaking about. So let me pick up the context of analyzing businesses. You have all this data. I mean, there's real-time information out there. There's Bloomberg, and I don't have Bloomberg, and there's CNBC, and I don't have a television. So there's all these sources of so-called information. Most of it is, in my view, noise. So if you shut out all of it, you have filtered out a lot of the noise. But there's more as you go through analyzing a business, you come across data, for example, quarterly results, you start thinking about CSCANDY. If you think about C is candy, C-SCANDY loses money as, if I recall correctly, about eight months in a year. It loses money, four months in a year, it makes money, and it's a fabulous business. You all know that. So here is a business which is a fabulous business, which has created a wonderful cash flow, which has helped Berkshire become awarded to”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

26. “Where you have shut out a lot of the distractions of life. So he writes in his book that there is a room where he has no electronics and he cannot be disturbed when he is in that room. And I think that's a very useful way of doing things. And I'm not there yet, but that's one of my aspirations to have a room where there is no electronics and no distraction. And there's a big do not disturb sign outside and where you can just sit and think, which is exactly what I think Buffett does or what Warren does and what I think most successful investors do. And it's not just about investing, it's about everything in life. If you want to make decisions, you need to shut out a lot of the noise. You have to really focus on things that really matter. And sometimes the things that really matter are far fewer than what it appears.”

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27. “Yes, I think that's absolutely the right way of thinking about it and I completely agree with you that you have to have a physical environment. One way I've done that is to give up on television. So I don't have a television. The other thing which I did recently was shut out, take away Yahoo Finance as a bookmark on my browser. So I don't get to see stock prices as often as I used to. And it does look a bit odd in the beginning, but if you do this long enough, I'm more at peace. Apparently there is a lot of volatility in the markets as we speak right now, but I have no idea as to what has happened to a specific business because I'm not looked at the stock price. I think that's very helpful to me. Guy Speer has written a marvelous passage in his book where he wrote about creating a physical space.”

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28. “You have to have the structural advantages that some people have to be able to have the privilege of thinking along those lines.”

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29. “You don't discard your least performing businesses. And I think they've done that and they've done that over decades and have created a position in the minds of the owners of admirable businesses out there that here is a place where I can give my business to somebody and that's not going to be sold off to a private equity investor or to be liquidated because it doesn't make sense. Even though in the short term, it might cost Berkshire some money in the long run. It has created a huge reputational advantage for them and of course that has helped Berkshire. I think there is something to be learned from that. But when you're running a fund, when you have investors who can pull the money out at a short notice, you probably cannot think on those lines and which is something which Buffett and Charlie are familiar with and they don't have their structural disadvantages. So you have to be very careful about these notions because”

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30. “I think there's something to be learned on that from the experience of Charlie and Warren. I think we all know this, that they really sell out of a business, even though it's not doing well. Even though economically it should be closed. But why don't they shut it down? Why don't they get out of a business? Usually they don't. And I think the reason is that they've created a culture when they want to be a natural partner for a business to be owned by Berkshire. And you don't get to that kind of state if you start treating businesses as a game of rummy.”

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31. “Going on, there are three or four players, and they are essentially giving huge discounts to consumers. To purchase their products and to not go to bricks and mortar stores, and people are doing that. But all of these e-commerce companies, they are bleeding cash, but they have rich investors who are willing to give them money to gain market share. And as long as that money keeps on coming, it's going to be very difficult for the BRICS and Morder players to be able to effectively compete. So we see a kind of situation where if you want to understand this situation, you cannot understand without thinking about psychology. What gets a business to continue to operate even though it doesn't make economic sense. Why does that happen? That helps.”

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32. “Is life, and you should shut it down, but if you study Charlie and if you study Warren Buffett's life, you'll find out that actually you should shut it down well before when it makes sense for you to shut it down because you have to think about opportunity costs. And a lot of people will not shut down even if it makes sense to shut down because they figured that the other guy is going to blink first. So they operate in a competitive market and we're seeing that right now in many industries. Look at what is happening to shale or oil production and even in Canada or in the US compared to what is happening in the Middle East. People will keep on producing things even though it doesn't make sense for them to produce it because they think that somebody else will shut down before they would. And sometimes they are right and often they're wrong. And when they're right often they're right because they have a backing of somebody who is going to fund them. And in today's world you have these markets which will fund you and we're seeing that in India. We have an e-commerce bubble.”

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33. “It has in many ways and when you look at the world out there you can't think about it without thinking about incentives and that's one of the most important lessons of that Charlie has given that you must have a two-tier system in trying to understand the world out there and we talk about economics and economics is incomplete without psychology and you know we have all these notions about the rational man models in economics and most of economics is based on the idea that human beings are rational but most of social psychology actually tells you that we are quite dumb very often we make very foolish mistakes and I think both the disciplines of economics and psychology are kind of connected and if you if you put that in the context let me give an example you know as an accountant I learned about the idea of shutdown point that there is a point in a business”

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34. “It was pure Graham sty Investing was called security analysis, and I would mostly talk about risk arbitrage, about bankruptcy investing, about investing in cash bargains and statistical screens that Graham used to create and talk about in his books. It was purely that. The idea that there could be a great business out there and the idea there could be a competitive advantage out there, I was not even known to me at that time. And most of the discussion was revolving around financial statement analysis. Instead of going to the reason as to why is this business successful? And when you go into the question why, the answers come from many sources. Why does a customer buy this product? What is it that the customer likes? Why does he not buy somebody else's product? Why would a competitor not enter this market? Why wouldn't they even try? Those are very profound questions and you won't know the answers to this question.”

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35. “Else going on absolutely, there's nothing else going on. I was alone. I think it was stupendous to be able to read it over and over again, make notes, try to relate to the power of the ideas that he has laid out in those couple of talks were so powerful for me and I had the conviction to teach it and learn it through teaching and it's been very helpful for my students and for me and my journey as a value investor is not complete unless I bring up my discussion on mental models.”

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36. “Idea that there could be different kinds of businesses, and some businesses could be remarkably having remarkable good quality and one should ask why do they have this good quality. And then of course once you start talking about that, you end up discovering Charlie Banga. And once you pick up Charlie Banga, you ultimately discover the power of multidisciplinary thinking. So all of that happened. It took me about 10 years to get there. So I started practicing value investing in ID4. When I discovered Charlie's talk on”

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37. “Got those annual reports. Debbie, his secretary, wrote a letter to me that you have to send the postage money, which was probably the best investment I ever made. So I got those annual reports, letters of Bakshahath. As I read through them, I discovered Graham. And I picked up on Graham because I was an accountant, as I mentioned earlier. I could relate to what Graham was saying. Up until now, I knew that there is how financial statements get prepared, what is book value, and what is profit and what are margins. And I knew all of those things, but I had no idea whether this is cheap or expensive. And Graham provides a very good framework for people who are good in accounting to be able to figure out fairly quickly whether this is cheap or expensive. So I found that very interesting and I started practicing Graham style investing from then onwards. It's only much, much later that I chanced upon the”

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38. “Not at all. I had no idea about all of that. Not until 2004. So I was a one-rick pony at that time. I was only an accountant. I knew how financial statements get created from transactions, any all of that, but I had no idea what a good business and what is a bad business and what is a mediocre business and why. And I was studying at the London School of Economics in 1990 when I chanced upon an article on an obscure guy operates out of Omaha, has a wonderful track record, says the markets are quite inefficient, which was quite the opposite of what I was being taught at the LSE. So I found that very interesting. That particular article also said that he writes wonderful letters and you can get them for free if you write to him. So I wrote to Mr. Buffett and within four days I got the”

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39. “People like you are playing in bringing that kind of knowledge to the world out there. It's not just about investing. You have to be able to apply in other disciplines as well”

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40. “I think it's wrong to assume that the idea of multidisciplinary thinking that Charlie Munger talks about should be applied only to investing. In fact, you should use investing merely as an excuse to be able to illustrate the idea that you can use multidisciplinary thinking in pretty much everything that you do. And I think that's a very useful skill to acquire. And Charlie offers you a way to do that. And of course, the way he has done that is to be investfully. But if you read through his letters and his talks, he is very, really actually only talking about things which have to do with investing. There are other applications. And if you look around the world, the really good thinkers, they do think in terms of multidisciplinary applications. I do think that there is a lot of Charlie Monger fans out there, even though they don't know of Charlie. And I think there is a role that people”

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41. “Absolutely, absolutely. And the way to do that is to always answer a question why by the phrase part of the reason because that removes the availability heuristic. The first conclusion bias because there are in a world which is full of complexity, there are multiple answers. There are second order effects and third order effects. And you can think of those, I think, especially well if you start your answers with the phrase part of the reason.”

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42. “Well, Charlie's already taught us how to do that. We just follow what he says, you know, we try to look at a problem from multiple perspectives. And that's, I think, the correct way of doing it. When you are trying to evaluate something, you're trying to ask the question why. Why did this happen? And when you reflect upon it, you find that the answer sometimes comes from multiple disciplines and you get down to that and try to figure it out. It is very enjoyable to do it in that way. The process for me has always been to ask the question why and wait because the mind will tend to jump to a certain answer and that's not the only answer. So the way I think about it is whenever there is a complex question which I'm trying to answer. I always start with the words part of the reason is this and which means that they must be other parts too and I like to think about what those parts could be and they don't have to be 20 of them even if they are three or four of them that's better than one.”

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43. “It's kind of replicates what your human brain does. It helps you create thoughts and it helps you connect different kinds of thoughts and you can put your emails in it and you can put your sound files in it and you can put any kind of document in it and then you can look at any particular topic from the perspective of a thought. So you have all these thoughts which are connected and this is exactly how the human brain works and new associations are created. So when you're looking at that brain screen you see and your actual brain is thinking about those associations. New associations get created. So in a sense it's an external brain which is working for you and the size of that thing keeps on growing and it's virtually infinite. You know, you can keep on adding stuff in it.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

44. “I do. I use Evernote. That's been helpful to me. I use other tools like the brain, which is a wonderful piece of software available.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

45. “Not always, but I have a master document because once you have it on the cloud, you can always copy and paste it any annotations, any underlying text for that particular book in a different document. I do that for some books, though not all of them.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

46. “Because I've already studied the underlying text the second time. So I've done a sense, a second reading of the things that I like the most in that particular book. And I let that be kind of reside in my memory for some time. And then when I'm experiencing the world out there and there is a moment when”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

47. “I don't like to read one book. I would maybe read about three or four books at any given point of time and I finish them then I will pick up another three or three books to read one reason is you get kind of bored by reading the same thing same subject and you know based on what Charlie said that you should have multidisciplinary mindset so it's good to have different books from different disciplines and read them and then one of the amazing things that I discovered is that you kind of associate one for the with the other ones and that really is helpful to me so far as note taking is concerned I underline stuff on the fly as I read it and once the book is over I go back on the cloud and take out whatever I've under underlined in that particular book whatever notes I have whatever annotations that are there and I would put them in a different document and then I'll let that be”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

48. “That's true, but I think there's a trade off here. You might retain more when you read a physical book and you might retain a bit less, but that kind of gets offset by the fact that you are creating a document on the cloud which contains the best things that you have read in a book, the ones which influenced you the most because you have underlined them. Sometimes the underlined portions of a book span many pages and all of that gets synced to the cloud. And when you work on that particular passage again in the context of something that you're trying to evaluate, then all of that comes back. So in a sense, I think there is a trade-off here while leading on a book, you get to underline physically and you may have a moment of reflection and you may write things on the side. You can do that in a Kindle as well. So NetNet, I think I don't feel the loss of memory if I am using a physical.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

49. “Yes, I like to, but only for books. Of course, there are annual reports and there's a lot of wisdom in annual reports of businesses that I like to study and that you don't get on Kindle. I don't like reading on computer monitors. It's very strenuous to the eye. Kindle, therefore, is much better because it doesn't have any eye strain. Then, of course, there are letters written by other investors which are not available on Kindle usually. So I look at, I read on Kindle any book that is available on Kindle. Some books are not. Then you have to buy the physical ones.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT

50. “And the interesting thing is that you sometimes discover things that you didn't know existed. The serendipitous discovery of wonderful words of wisdom about a certain topic in your Kindle library are amazing and that happens. I have my Ureka moments. And the other reason why I love Kindle is because you can underline stuff and write your own notes and they get synced to the cloud. And once they're in the cloud, you can copy paste. You can use it for your lectures and it's very helpful. So I'm very grateful to Amazon. And of course it's environmental friendly. You don't have to waste paper.”

    2015-09-18 · The Knowledge Project with Shane Parrish · #3 Sanjay Bakshi: Why Mental Models · IDENTIFIED FROM THE TRANSCRIPT