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TIP606: Multi-Bagger First Principles w/ Ian Cassel

Feb 9, 2024

01:00:11

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Ian Cassel, a full-time microcap investor and CIO of Intelligent Fanatics Capital Management, discusses multi-bagger first principles, lessons learned from investor Tony Deden, high insider ownership's correlation with stock performance, and the impact of attribution bias. He also shares case studies on multi-baggers and his decision-making process for averaging down in a position.

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Quick takeaways

Developing one's temperament and principles is key to finding an investing strategy that aligns with one's natural temperament.

The ultimate goal for successful investors is 'active patience,' which means knowing what you are looking for and exercising restraint until you find it.

Many multi-bagger stocks are smaller businesses with steady revenue and earnings growth, minimal dilution, and a unique market position.

Deep dives

Developing Your Temperament and Principles

When reflecting on his investing process, Ian Castle emphasizes the importance of developing one's temperament and principles. He believes that understanding one's risk tolerance, time horizon, volatility preferences, and position sizing is key to finding an investing strategy that aligns with one's natural temperament. Castle highlights that it can take years or even decades to fully understand who you are as an investor and to define the characteristics of companies and leaders that are mandatory for making investment decisions. He emphasizes the value of making mistakes, learning from them, and refining one's investing approach over time.

Real Multi Baggers in the Public Marketplace

01:22

Analyzing Portfolio Losses and Mistakes

01:58

Benefits of Micro Cap Investing and Going Public for Small Businesses

01:52

Developing Your Investment Temperament

01:23

Introduction

2min

Self-reflection and analysis

16min

The Maturation of an Investor

8min

Differentiating Monopoly and One of One Businesses

2min

Characteristics of Real Multi Baggers

13min

Value Creation and Impressive Leadership in a Growing Business

5min

The Myth of the Multi-Bagger Run

17min

Challenges in Investing and the Temptation to Average Down

2min

On today’s episode, Clay is joined by Ian Cassel to discuss multi-bagger first principles, what he’s learned from investor Tony Deden, and biases he has had to overcome to continue improving as an investor.

Ian is a full-time microcap investor and CIO of Intelligent Fanatics Capital Management. He is the founder of MicroCapClub.com and co-founder of the IntelligentFanatics.com.

IN THIS EPISODE YOU’LL LEARN:

00:00 - Intro.

01:36 - Ian’s investment journaling and reflection process.

06:19 - What Ian has learned from managing a fund for over 5 years.

08:56 - A 2023 overview for Ian’s fund.

23:58 - What Ian learned from Anthony Deden.

27:43 - The multi-bagger first principles.

35:53 - A few case studies on multi-baggers.

53:26 - Why high insider ownership doesn’t correlate with stocks that outperform.

54:02 - How attribution bias influences investor behavior.

58:08 - Ian’s experience on the saying, “Risk is what you don’t see.”

61:03 - How Ian decides whether he should average down in a position or not.

Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
Learn more about the Berkshire Summit by clicking here or emailing Clay at clay@theinvestorspodcast.com.
Ian’s presentation on Multi-bagger First Principles.
Ian’s community, MicrocapClub.
Ian’s book, Intelligent Fanatics.
Ryan Pape’s interview at the MicroCap Leadership Summit.
Related Episode: TIP563: Lightning in a Bottle & Microcap Investing w/ Ian Cassel | YouTube Video.
Follow Ian on Twitter.
Follow Clay on Twitter.
Check out all the books mentioned and discussed in our podcast episodes here.

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We Study Billionaires - The Investor’s Podcast Network

TIP606: Multi-Bagger First Principles w/ Ian Cassel