I’ve always been intrigued by the idea of mental models too. Just having a framework in mind often helps in thinking through things.
One such framework, I’d like to highlight is the 7 Powers by Hamilton Helmer. It just breaks down competitive advantage into 7 categories -
- Scale
- Network Effects
- Brand
- Counter Positioning
- Process Power
- Switching Costs
- Cornered Resource
So now, whenever someone mentions “Moat” I can’t help but try to better understand which of the powers is the business leveraging. (Can be more than 1)
As mentioned above in the thread, if someone is interested in knowing more about mental models, Munger is the go-to guy. I highly recommend the book “Seeking Wisdom: From Darwin to Munger”. Also stuff by Taleb, Kahneman, Mauboussin is great. (Honestly, the list seems endless here)
Also, I recently wrote about 23 mental models and their investing significance. You can check that out too, on the off chance it interests you.
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