TIP846: Stock Picker: How to Live Off Your Portfolio w/ Ian Cassel

SPEAKER_1 (0:00)

You're listening to TIP.

Stig Brodersen (0:03)

In today's episode, I'm joined by Ian Cassel to talk about his new book, Stock Picker. Ian has never had a normal job. His parents handed him $20,000 at 16, and by 28, he was living off his own portfolio as a full-time private microcap investor. But of course, this is not a story about how life and investing is just up and to the right. This is a deeply personal book, and it's a deeply personal conversation. We talk about the fund manager who insulted Ian at a cocktail party back in 2009, and how the anger kept him going. We talk about his first mentor and why you should only take advice from happy people. And we talk about why most microcaps you buy should be sold within 36 months, even the winners, which may sound surprising if you're raised in the church of Buffett and Munger, like I was.

Toward the end, I grill Ian about his fund, his fees, and why he benchmarked himself against S&P 500 when so few microcap managers do.

Full disclosure, I'm not invested in Ian's fund.

SPEAKER_1 (1:06)

Since 2014, with more than 200 million downloads, we have interviewed the world's best investors, studied deeply the principles of value investing, and uncovered many compelling investment opportunities.

We focus on understanding businesses and intrinsic value, investing accordingly, and sharing everything we learn with you. This show is not investment advice. It's intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investment in the securities discussed. Now for your host, Stig Brodersen.

Stig Brodersen (1:51)

Welcome to The Investor's Podcast. I'm your host, Stig Brodersen, and I'm here with Ian Cassel to talk about his new wonderful book, Stock Picker. Ian, how are you this morning?

Ian Cassel (2:00)

Stig Brodersen I'm doing great, Stig. Thanks for doing this. I really appreciate the opportunity to tell more people about the book.

Stig Brodersen (2:06)

Stig Brodersen Fantastic. So Ian, I have to start by saying this is a deeply personal book, and I'm kind of curious to hear which story was the hardest to write. And of course, I'm going to continue rambling even though I just asked you a question. But my guess, now that you haven't asked me, but my guess is that perhaps the essays that opened the book, What is Chasing You, it was very eloquent. And because admitting that a stranger got under your skin, that cannot have been easy.

Or perhaps, I just said it was the hardest story, perhaps it was the easiest story because it sort of like had to get out there right out of the gates. And so perhaps, Ian, please tell us the story of how a fund manager insulted you at this cocktail party back in 2009 and how you woke up thinking about that person for years.

Ian Cassel (2:55)

Yeah, I appreciate that. And I think that's a good way to lead off. I mean, I really wanted to write a book that was personal, that was authentic. You know, I didn't read like, you know, be a guru like Ian or how to invest in microcaps, you know, like an instruction manual. I wanted to have a connection. So I appreciate that you picked up on that as well. The hardest chapters I would say to write were the personal ones. You know, there's a chapter in there about a mentor of mine, which I'm sure we'll get into. There's a chapter about losing my mother. There's a chapter, you know, really the last chapter about compounding, you know, just reflecting on my kids and make it impact on them in a positive way.

You know, that has nothing to do about with the stock market. You know, those were kind of impactful, harder chapters to write. And obviously, the What is Chasing You, which was kind of the lead off chapter, kind of fits that same category.

It's a personal one and I would say it was also equally fulfilling, you know, to write that as well because it's a chapter that could only be written after, you know, 20 years of going through a journey and kind of looking back and reflecting on the different things that have kind of chased me over that 20 years. And you know, I think one of the things, you know, and I'll get to the story that you wanted me to articulate on, but I think one of the things early in my career, you know, I made the pursuit of being a full-time private investor, kind of my top priority.

And I think that's, quite honestly, I think that's a very lonely pursuit. You know, a lot of people that you run into, including your close friends and family, they might not understand what that even means. You know, they'll kind of push back on that, you know, because they don't really understand it or your desire to achieve it. And you know, some people will say you're an idiot, you should be doing a normal career or working for your dad in my case or all of the above. And you know, I think it just kind of gives you more fuel for the fire to really ultimately, you know, reach that goal. And because I think it's a goal that can be rather lonely, at least the pursuit of it in some ways. You know, the other side of that is once you achieve it, it kind of all boils up inside you and you want to kind of prove to the world that you were right and they were wrong. And you know, over that journey of 10 years, you see other kind of younger people that you may have graduated with or know or don't know, and they're receiving accolades because of their career journey. And you're just kind of sitting in the corner of your basement trying to trade stocks or invest in companies and create kind of long-term wealth for yourself. And finally, when you finally make it, it's just, you know, screw you like middle finger to everybody that said I was wrong or I couldn't do it. And so that's kind of like the negative side of kind of that isolationism of chasing a pursuit like that. But, you know, so yeah, so I think that early story, which was probably around April of 2009, a fund manager friend of mine invited me to a cocktail reception in New York City.