Ian Cassel: The Stock Picker: How to Develop the Mindset, Temperament, and Strategy to Outperform Wall Street

Ian Cassel (0:00)

It's not what you can do randomly, that will produce you a long-term return, it's what you can do consistently. And I think that your temperament can change and evolve, especially as it relates to kind of position sizing. I think that's probably the area that I've evolved. My temperament is towards position sizing, going from, okay, I'm a two to four-stock investor taking 25% positions to I'm a 15-stock investor taking three to 5% at-cost positions.

And the irony is, I don't think I'm really giving up anything. I'm giving up a lot of volatility probably. Well, I know I am, you know, by doing it this way. But I don't think I'm giving up that much in regards to potential return, you know, doing it this way, giving myself a few more chances to win. There's this kind of structural barrier or a wall around the city that keeps the institutions out because the illiquidity is what keeps them out. You can only buy so much of, you know, 100 stocks that trade $10,000 USD a day.

It takes too long to acquire a position and it's impossible to sell one, sell any of them, you know, and so institutions, larger pools of capital, they don't like illiquidity. Oddly enough, they prefer no liquidity, whether that's private equity or venture capital, which is also small business investing. But they do not prefer anything with any liquidity, you know, such as small public micro caps. And so that's kind of an interesting thing too. So, you know, when you look at all, pretty much all of the best stock pickers ever, they all started their careers investing in micro cap for this reason. A lot of it just takes a relationship and reps, you know, and that's why the reps with management teams that I put in and with my current CEOs that I own is very important. Those reps kind of get me to find out if this leader is who I think they could be. And, you know, you have to be rational about it. And when you realize that they are not, you sell. Just takes a long time to find these businesses that are worthy and have leadership worthy of owning and not just renting.

Bogumil Baranowski (2:16)

Welcome to Talking Billions. We talk about big ideas, big inspirations, big topics. We take on the hardest topic of all, money. How to make it, save it, keep it. But our conversations lead us to an even bigger question, what it means to live a rich life beyond money.

My guests share their practices, principles and evergreen wisdom. I'm your host, Bogumil Baranowski, author, TEDx speaker and investment advisor to wealth creators with patient capital and an infinite investment horizon. I work with families and individuals who aspire to grow wealth over a lifetime and generations through disciplined, thoughtful investments in durable, quality businesses, while giving money, meaning. Join me on this quest to unearth and share the wisdom of the ages. Let me share with you the podcast program disclosure statement. Blue Infinitas Capital, LLC, is a registered investment advisor, and the opinions expressed by the firm's employees and podcast guests on the show are their own and do not reflect the opinions of Blue Infinitas Capital. All the statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice. The information presented is for educational purposes only, and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. The information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal or investment advisor to determine whether any information presented may be suitable for their specific situation.

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