My guest this week is Ian Cassel, a microcap investor who is always on the lookout for small companies which are run by men and women who are what he calls intelligent fanatics. Ian’s livelihood is based on the success or failure of a small group of companies that you have never hear of—he takes the idea of “skin in the game” to another level. We explore what Ian looks for in managers, why investors might want invest in microcap companies and the benefits of a frugal approach to life. Buying public companies that are as small as the ones which Ian considers is an entirely different style of investing than what most of us are used to in the public markets. Please enjoy!
Books Referenced
Intelligent Fanatics Project: How Great Leaders Build Sustainable Businesses
Zero to One: Notes on Startups, or How to Build the Future
How to Win Friends & Influence People
Getting There: A Book of Mentors
100 Baggers: Stocks That Return 100-to-1 and How To Find Them
Links Referenced
Seven Intelligent Fanatics From India
Show Notes
1:53 – (first question) – What is an intelligent fanatic and what drew Ian to it for his career.
2:28 – Intelligent Fanatics Project: How Great Leaders Build Sustainable Businesses
4:58 – Why intelligent fanatics is so important to him as a microcap investor
5:32 – Seven Intelligent Fanatics From India
6:00 – What are the most common characteristics shared by intelligent fanatics
7:21 – What drew Ian to microcaps and what unique opportunities does it present
10:52 – What makes this such a fertile but less efficient space to invest in
14:48 – What happens when you buy these small companies with market cap under $50 million
15:51 – What does Ian look for to avoid pitfalls when buying into microcap companies
17:07 – Looking at Ian’s portfolio and the number of stocks and how often he turns them over
18:49 – Exploring the process and characteristics that are important to Ian when choosing a company that he will take a position in
22:43 – How is Ian’s valuation approach different from a systematic strategy to choosing microcaps
25:09 – Ian’s price discipline and when does something become too expensive
26:17 – Does statistical achievement matter
26:40 – What are the reasons to sell a position in a business
29:37 – Does intuition play a large role for Ian when exploring a company
30:32 – Does Ian think about going into the private company space
32:00 – What does the average microcap investor look like and why does Ian not take outside money for his investments
32:40 – MicroCapClub
33:45 – Ian explains how he got started and why he is focused on Microcap investments
37:09 – What was the next step for Ian that led him into analyzing larger microcap investments
40:09 – After landing on Ian’s radar, what does he do in terms of approaching a new business
43:06 – Any industries or companies that Ian actively avoids
44:30 – The formula for what makes a company un-disruptable
45:42 – What are the most common dimensions of an enduring moat
47:58 – What is Ian’s philosophy when it comes to the investment of his time and how frugality plays into it
52:33 – The power of his persistence and luck to be able to do this
54:13 – The most memorable individual day for Ian
55:56 – Kindest thing anyone has ever done for Ian
58:01 - Floats and Moats
58:55 – Some of the publications that have changed the way Ian thinks and acts
59:22 – Zero to One: Notes on Startups, or How to Build the Future
59:45 – How to Win Friends & Influence People
59:54 – Think and Grow Rich
1:01:00 – Getting There: A Book of Mentors
1:01:57 – What company should people go back and look at old company reports to help them understand how things flow
1:03:24 – 100 Baggers: Stocks That Return 100-to-1 and How To Find Them
Learn More
For more episodes go to InvestorFieldGuide.com/podcast.
Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub
Follow Patrick on twitter at @patrick_oshag
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