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by
Sean Iddings
Read between
November 16 - December 11, 2018
Founder, CEO or management team with unconventional ideas and a fanatical drive to build a high-performance organization.
A learning machine that can quickly adapt to change. Able to create a trust based culture that aligns everyone to think like owners. Focused on acquiring, training, and motivating the best talent. Their time horizon is in ten-year increments, not quarterly, and they invest in their businesses accordingly. Regardless of the industry, they are able to create an impenetrable moat that competitors initially cannot understand and eventually fear.
Microcap companies offer investment opportunity because they are small, unknown, and generally ignored by many investors.
The key to outsized returns is finding great companies early, because all great companies started as small companies.
big part of my investing process is finding and betting on the right founder or CEO. I want to find a founder who has the ability to grow a small business into a large one. These founders are rare, and they are what Charlie Munger first referred to as “intelligent fanatics.”
He played the chain store game harder and better than anyone else. Walton invented practically nothing. But he copied everything anybody else ever did that was smart—and he did it with more fanaticism and better employee manipulation. So he just blew right by them all.
In the United States, small businesses employ 50% of the workforce, and small businesses accounted for 64% of net new jobs added over the past ten years.
National Federation of Independent Business evaluated the latest U.S. census and survey data and concluded that only 39% of all small businesses make a profit over their lifetime.1
When some idea is shaking you so hard, you’re willing to go into poverty to make it a reality, that’s when you become an entrepreneur. Reed Hastings, founder of Netflix
Sanjay Bakshi wrote an article entitled “Seven Intelligent Fanatics from India.”
integrity, energy, and intelligence.
Intelligent fanatic = (Long-term vision + Intelligence + Energy + Perseverance + Execution) x Integrity
John H. Patterson —National Cash Register Simon Marks —Marks & Spencer Sol Price —FedMart & Price Club Les Schwab —Les Schwab Tire Centers Herb Kelleher —Southwest Airlines Chester Cadieux —QuikTrip F. Kenneth Iverson—Nucor 3G partners —Garantia, Lojas Americanas, and Anheuser-Busch InBev
