At the Smallcap Discoveries Private Investor Conference in October, Ian Cassel presented a talk entitled, “Investing is Hard.” He opened his talk with several interesting case studies, featuring companies such as Amazon, Valent Pharmaceuticals, Apple and Monster Beverage. He then listed several lessons he has learned during his career:
- “Successful investing is counterintuitive to our human nature. It’s a lifelong process of retraining our minds to think different and better.”
- Whether an investor is successful or not, Cassel argues, depends on “when they sell losers or lean into winners.”
- A holding period of “forever” only works when “management executes forever,” so investors need to understand the inner workings of the businesses they buy. “Businesses are not excel spreadsheets,” says Cassel. “They’re people.”
- The vast majority of due diligence is “analyzing if customers and employees are happy and why.” Most investors won’t do this, says Cassel, which offers a clear advantage to those that do.
- “The only thing more important than having an investment thesis is knowing what will kill your investment thesis and having the decisiveness to act.”
- Investors should be prepared to be wrong.
- “One of the biggest mistakes investors make is selling their winners and buying more of their losers.”
- Cassel concludes by underscoring the need for investors to trust their own research. He warns, “Don’t bother finding the next multi-bagger if you aren’t going to develop the conviction to hold it.”
- He ended the talk with the following advice: “Do the work. Wait for the pitch. Swing hard.”