Alpha Ideas

The term “Intelligent Fanatic” was first coined by Charlie Munger.

He said “If you get an opportunity to get into a wonderful business  that’s being run by an intelligent fanatic and if you don’t load up,it’s a big mistake.”

The term was picked up by Prof. Sanjay Bakshi who at a value investor conference spoke on “The Seven Intelligent Fanatics of India”

The Book –The Intelligent Fanatics Project by Sean Iddings & Ian Cassel-takes off from there and describes the business successes and challenges of eight business leaders from US/UK/Brazil.

In the Indian context,its obvious that betting on the right person early can lead to super results as illustrated by Anand Mahindra’s tweet:

1985. Young Uday Kotak enters my office&offers financing.He’s so smart,I ask if I can invest in him.My Best decision https://t.co/cCfntHkiih

— anand mahindra (@anandmahindra) March 25, 2017

The key question and the one that the Book attempts to answer is whether such intelligent fanatics can be identified early or is it just hindsight bias?

As per the Book,

• The only truly sustainable competitive advantage is a company’s human capital/culture. As the saying goes, “Culture eats Strategy for breakfast”
• A indicator of strong culture is paying employees well,attracting great talent and succession planning from within
• Having a Vision and a Mission which motivates and inspires employees
• Commitment to Integrity
• Commitment to Thrift
• Commitment to innovation-Doing things new in the industry/trade
• High “skin in the game” by owning significant part of the Company
• Keeping things simple…focus,focus,focus
• Dominate a small market before expanding