Sanjay Bakshi

Sanjay Bakshi (@Sanjay__Bakshi) joined Shane Parrish (@FarnamStreet) on The Knowledge Project podcast to talk about reading, interdisciplinary thinking, and why to remove Yahoo finance from your bookmarks. This is one of the best interviews I’ve ever heard, I listened to it 6 times.

As always, these notes will be just a small sampling of what was discussed The topics we’ll get to include:

Read widely. –  How to become an interdisciplinary thinker. – The importance of environment (how to be more productive without moving to Bulgaria).  – Boiling frogs and mental models.


The interview begins with Bakshi explaining to Parrish that he reads all his books on the Kindle. This is in contrast to Michael Mauboussin’s conversation with Parrish. Mauboussin said he prefers physical books in part because of how he remembers things.

Bakshi acknowledges this, but says there are tradeoffs. One of which is that your notes get backed up to the cloud. He says that the ability to search is highly valuable. Plus, you can enjoy serendipitous discoveries.

I thought I would try this. I opened Evernote and found two (forgotten) notes about serendipity.

In Manage Your Day to Day, Scott Belsky wrote about a camping trip. He’s out in the woods, totally unplugged. He writes that he was bored the first day. Then, “my brain suddenly reactivated.  My creativity and imagination reached a new velocity as soon as I unplugged.” He goes on to explain that by unplugging, he began to think in new ways and create serendipitous connections.

Another note was Maria Popova’s interview with Copyblogger, where she spoke about the difference between research and search:

“And I think that’s part of our challenge today, not just semantically but also practically – we tend to conflate “research” with search, which is always driven by looking for something you already know you’re interested in; but I think the richest “research” is driven by discovery, that intersection of curiosity and serendipity that lets you expand your intellectual and creative comfort zone beyond what you already knew you were looking for.”

By using digital books, with notes stored in the cloud, Bakshi is conducting research under Popova’s definition. This distinction is important. If we feed ourselves too much of the same thing, and only search, we are susceptible to confirmation bias. One way to combat this, said Jason Zweig, is to follow people on Twitter you don’t agree with. 

Bakshi says that “net net” he doesn’t feel a loss by choosing digital. This perspective has two important points.

First, Bakshi recognizes tradeoffs. He understands the complete picture, and it’s not bimodal. One form of books is not superior to the other. We’ll get to this in just a moment when Bakshi explains “Part of the Reason” thinking.

Second, it’s a tell. “Net net” is a tell that someone has been influenced by Benjamin Graham’s value investing (and that we should listen to them).

In Graham’s definition, net net is the liquidation value of a company after it pays all its debts. Graham explained this idea because he was able to find companies valued less than their net-net. How, Graham wondered, could a stock be worth less than their net net value?

That would be like Apple being worth less than their $203M cash on hand rather than their $657B market capitalization.

Please, just read.

No matter how you do it, with digital or physical books. No matter what you read, from Benjamin Graham to On The Origin of Species, read.

Naval Ravikant said we should read widely. Chris Sacca says everyone successful he knows reads a lot. Jim Kwik said, “the intelligent person learns from their own experience but the wise person learns from the experience of other people.” Howard Marks said that the best way to avoid mistakes is to read widely. Tren Griffin explained how Charlie Munger does this (and Griffin too).

While the access to books has never been greater, the task of reading has never been harder. Tyler Cowen says that today we try to drink from a firehose of information. Naval Ravikant said we are tempted by “dopamine snacks.” You need to read if you want to be an interdisciplinary thinker.  

Interdisciplinary thinking – or the question that will make you a better thinker.

“I always start with ‘part of the reason is this.’” – Sanjay Bakshi

What a powerful statement. “Part of the reason is this.” The beauty in this one sentence is that it nudges us to figure out what the other reasons are.

When you start to think this way, Bakshi explains, you start to avoid mistakes. Tren Griffin said similar things in his a16z interview, and it should be noted that both Griffin and Bakshi read, studied, and learned from Charlie Munger.

Why does thinking in this way help us?

It rules out the availability bias.

Remember the last car you bought? Once you started driving it around you probably began to see it everywhere. Or, remember in the 2014 ebola scare? Many people were afraid of infection, but paradoxically, didn’t get a flu shot. Six times as many people died from the flu in the United States than died from ebola worldwide.

This is the heart of the availability bias. When something is at the forefront of our thoughts, we assume it to be the correct answer. Sometimes this works. Sometimes it doesn’t, and usually that involves 2nd level consequences.

When asked if letting more students into Harvard was a good idea, Tyler Cowen thought through the 2nd (and 3rd) level answers. Ray Dalio writes about this in Principles. Howard Marks explained his 2nd level thinking to Barry Ritholtz. Second level (and beyond) thinking is to ask and “then what” or “part of the reason is this.”

thatsinterestinBakshi didn’t always think this way. When he was a student at the London School of Economics he learned that markets were efficient.

Then one day he read about someone in Omaha who said the markets weren’t efficient – and was making money because of it. Bakshi wrote to Warren Buffet and began to read more. This led to reading Charlie Munger and then Benjamin Graham.

Like a brother from another mother, Richard Thaler had the same experiences. Thaler too was learning about rational markets. Except, Thaler thought, they weren’t always rational. In Misbehaving Thaler writes, “although I had misgivings about some of the material presented in classes, I was never quite sure whether the problem was in the theory or in my flawed understanding of the subject matter.”

Thaler began to keep a list in his office, “dumb stuff people do.” Each time he found a bias or irrational market he added to the list. Then, much like Bakshi found Buffett, Thaler found someone to read, a psychologist named Daniel Kahneman.* With Kahneman, Thaler began to think that maybe his understanding wasn’t flawed. Maybe the markets were.

It took 10 years, Bakshi says, before he figured things out. Tyler Cowen said that he’s thankful to have straddled the internet and pre-internet worlds. It gave him time to learn without the temptation of the firehose of information or dopamine snacks.

I think this is part what makes Maria Popova’s Brain Pickings site so successful. A year after graduating from college, Popova’s work visa expired and she had to leave the United States. She returned to Bulgaria, where she didn’t have or high speed internet. Popova had to settle for whatever books were at her library. Those books were the classics. They included timeless wisdom. If you read her site now, you’ll see this. She references and is influenced by great ideas, which she originally saw without an internet connection in Bulgaria.

The importance of environment – create your own Bulgaria.

Okay, you’re ready to be a multidisciplinary thinker too? First, remove distractions.

  1. Internal Distractions.

There’s a gravitas required for thinking long term. Bakshi tells Parrish, “you can’t think long term unless you are financially independent.” Financial independence doesn’t mean you don’t work, just that you don’t have to. It removes the internal distraction of employment. Tren Griffin says that this is why Charlie Munger aimed to be wealthy early in his life, so he had enough money to read what he wanted.

When Tim Ferriss asked Naval Ravikant who he thought was successful, Naval said it was their “old Polish trainer.” How can two people with net worths in the  millions of dollars say that “Viktor” is successful?

He’s successful, says Naval, in that he doesn’t need anything.  This is something the stoic philosophy teaches. Seneca writes:

“For how little have we lost, when the two finest things of all will accompany us wherever we go, universal nature, and our individual virtue.”

If we always live in the natural world and we can always choose how we feel, what more do we really need? 

We are already wealthy if we are alive and control our thoughts. Those two things are quite precious. Keep these things in mind and you’ll limit the internal distractions. But, we also aren’t all philosophers, and need to get things done. For that we need to limit the external distractions.

  1. External Distractions.

What I want, says Bakshi, “is a room with no distractions and a big do not disturb sign outside.”

Bakshi says he’s removed the Yahoo Finance bookmark. It felt odd at first, but he’s glad he did it. Bakshi’s also gotten rid of his television.  Jason Zweig says the problem isn’t the information, but how it makes you feel. Dr. John Coates writes that losses to your portfolio, incite the release of cortisol. You react to a bear market like it was a real bear.


To make good decisions, says Bakshi, you need to distinguish between the signal and the noise. This is easier to do if you have less noise. (This is so obvious in hindsight.)

“If you want to make good decisions,” says Bakshi, “you have to rule out the things that don’t matter.”

Authors long ago figured this out. William Faulkner was once renting a house that lacked a lock on the room he was to write in. Knowing the importance of undisturbed work, Faulkner went ahead and removed the doorknob so as not to be disturbed. George R.R. Martin (author of Game of Thrones) writes on a computer with no internet connection. Christopher Nolan doesn’t use email.

Faulkner, Martin, Nolan have all eliminated external distractions (noise).

Bakshi’s gotten rid of his television and Yahoo data. He also removes data from statements. You get too much noise with quarterly results he says. Bakshi looks at things at 30, 15, 10, 5 year increments rather than quarterly.

Look at See’s Candy he tells Parrish. The company reports loses in 3 of 4 quarters, but it’s a great company. You’ll see that if you get rid of the quarterly noise.

Once you read widely and remove distractions, there’s one more thing that can help your thinking – funny names.

Why “boiling frog syndrome” is important even though it may not be true.

If you see something come up again and again, says Bakshi, it’s probably a new mental model. I’ve noticed that as I read more books about biology like; The Hour Between Dog and Wolf, Mean Genes, and Gut Feelings

Each book about biology builds another model to filter my thinking, but talking about “biology” or “testosterone and cortisol” doesn’t convey a summary.  The bear picture above does. It’s more visual and visceral.

Warren Buffett and Charlie Munger have many models explained Tren Griffin, and they give them funny names on purpose. It brings up an image that’s more than the sum of it’s parts. The boiling frog (much better than “legacy effect” right?) was important to the post about the end of jobs. It implied an urgency that people weren’t capturing and that was dangerous. The most famous of Buffett and Mungers expressions might be moats.

If you haven’t read Tren Griffin’s piece on moats, you should. Moats (competitive advantage – also a lackluster term) makes the additional point that you are defending something. It’s combatant. It’s defensive. This is what Buffett and Munger want people to think when they think about competitive advantage.

Let’s add one more. We’ll call it The Coupon Fallacy. Coupons typically look something like this:


Okay, so why not save something on cereal? The thing is though, lots of people use this coupon on cereal, but wouldn’t on something larger, like a new computer.

Study after study shows that people compare prices to save $100 on a new washing machine, but not on a new car. Even though the absolute savings is the same ($100) we see the fraction $100/$299 as more valuable $100/$35,000.

Thanks for reading, I’m @MikeDariano if you’d like to connect on Twitter.

* I wonder how things would be different if Amos Tversky, Daniel Kahneman’s research partner, were still alive. Only the ardents cite Tversky and Kahneman, of which Thaler is one. 

24 thoughts on “Sanjay Bakshi”

  1. This article encourages you to read classic books that include ‘timeless wisdom’ (debatable concept, btw). The author does not provide concrete examples, but I am afraid he thinks about old books written by authors that had no idea that concepts like soul, free will, god, afterlife are fairy tales. With all due respect for Seneca, a present day high school student knows more about the nature of the reality than Seneca. It’s not that reading works written by (or attributed to) Seneca is useless (Seneca is just a generic term for an author that wrote more that, say, 100 years ago). It’s that you don’t have to start with him. Your time resource is limited, start with the most recent works. Read Seneca only if you are curious what Seneca was thinking about a certain topic, but not for any other reason. Any insight useful for you from Seneca’s works, is already included in humanity’s most recent works. Don’t read the giants that hold other giants on their shoulders, but read the giants that stand on the shoulders of giants.
    PS Don’t read too much philosophy (not even recent philosophy)


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