Top 50 Microcap Managers: Ian Cassel
Hardly needing an introduction, this week’s Top 50 Microcap Investor is Ian Cassel. Ian is a full-time investor held in the highest regard amongst the microcap community, having founded the MicroCapClub, co-founded IntelligentFanatics.com, and later became CIO of Intelligent Fanatics Capital Management (IFCM).
Read our feature on Ian Cassel
Filters and Exclusion
“The first principle I operate from is the idea of exclusion. I exclude whole swaths of things from my universe of things. I think that, in the whole world, there are probably 150, 200 listed companies that I would even consider owning a piece of. It's a completely different way of looking at the world.” –Tony Deden
Figuring out what you don’t want is often the best way to find what you do want. Whether you’re thinking about a career, partner, house, or an investment, you can save both time and potential stress by first, and quickly, ruling out many things.
The first filter for those investing in individual stocks is usually circle of competence—the ability to understand a business. If you don’t understand the business, you may be entering the realm of speculation instead of investing. The next filters often revolve around some combination of business quality, management team, and price. Some people will only invest in great businesses, and some people will invest in any business at the right price. Some people assign management teams little importance, and some view it as the most important factor.
How much weight one gives to any of the above factors will depend on one’s philosophy and experience—often earned through the scars of investments gone wrong. Filters will evolve and as they do, it’ll get easier and easier to sift through ideas and find those worth pursuing. As Warren Buffett said about using the filters that he and Charlie Munger have developed over the years:
“Well, we do have filters. And sometimes those filters are very irritating to people who check in with us about businesses - because we really can say ‘no’ in 10 seconds or so to 90%+ of all of the things that come along simply because we have these filters.”
Seth Godin – Leadership vs. Management - What it means to make a difference
The world-renowned marketing and leadership author Seth Godin talks about the difference between leadership and management, the confusion surrounding them, and why the world needs more leaders.
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