Intelligent Fanatics was a term Charlie Munger used to describe a great entrepreneur and business builder. An individual that founded a company and built it into one that dominated their niche, geography, or industry. The cherry on top is that intelligent fanatics don’t just dominate for a year or two, but for decades.
These are the best of the best that create dominant and enduring businesses. Sean Iddings and I co-authored two books on intelligent fanatics.
We studied 100+ of them.
Do you know what the most common element was among all of them?
It was high standards. They executed on high standards every single day.
You don’t start with a single store in Arkansas and in 25 years become the largest retailer in the world without high standards.
You don’t launch a rocket ship into space and have it land back down to Earth again without high standards.
You don’t create the most dominant quick service restaurant chain in the United States that is also closed on Sundays without high standards.
Whether it’s Jeff Bezos’s customer obsession or Steve Job’s relentless pursuit of design and function. High Standards were the key.
High standards create dominant companies. High standards create great stock pickers. High standards create great families. High standards create great relationships. High standards change the world.
If you want to be like everyone else, lower your standards.
High standards transcend business into stock picking and even our personal lives.
I remember someone saying on a podcast, “Anyone that says time heals has never lost a child.” This statement struck me since I have two young children. A few years ago, a friend of a friend lost a child in a tragic accident.
My kids were three and six at the time. I decided right then and there I needed to hug my kids more. I felt I needed to step up and raise the standard.
Every morning, I started giving them hugs. BIG HUGS. I wouldn’t let go of them until they squirmed to get away. I did it consistently, every morning.
A few weeks ago I hugged my daughter when she came downstairs. She giggled and squirmed to get away like she always does.
When I finally let her go she said, “Are you ever going to stop hugging me?” and I replied, “Never” and she looked at me and said, “I know Daddy.”
Her response triggered something. I melted. I had to walk into the bathroom to get gain my composure. I couldn’t help but think to myself, “Ok she knows I love her. It doesn’t matter what happens tomorrow.”
I’ve noticed the older my children get the less they do what I say and the more they do what I do.
I’ve tried to become more self-aware of what I’m saying, doing, and how I’m reacting. My kids are always watching. It is slowly changing my behavior.
When I started viewing myself through their eyes there were things I didn’t like. I needed to be a better example. To set a high standard.
The easy times are easy. The hard times are hard.
What about when they see me having an argument with their mother? Do they see me treat her with respect? Do they see me listen to her? Do they hear me say “I love you” at the end? When it’s the last thing I want to say?
When my kids see me step up in hard situations like this it shows them what a real relationship looks like. It shows them it doesn’t matter what we are arguing about today, we still love each other.
More importantly it shows them how they should treat people and how they should expect to be treated. It shows my son and daughter what a man looks like.
It creates a high standard for their future relationships. I fail a lot but I’m slowly getting better at it. I must be the example.
My seven-year-old son is going through a phase where he’s thinking about what he wants to be when he grows up. I want to be a teacher. I want to be a baseball player. I want to be an astronaut. I want to work at a zoo. I want to be an uber driver. It’s hilarious because every week it is something different.
Every time he asks me, “Do you think I can do it?”
I reply, “Of course buddy. You can do anything you want.”
He wouldn’t ask me unless he needed that positive affirmation. All kids need it. But the older he gets he’ll stop asking me and start watching me.
He needs to see me chasing my dreams and making him a part of it. That is how he’ll know he can accomplish anything he wants in life. I need to be the example for him.
I don’t want you to think I’m perfect. I make tons of mistakes and say dumb things. Just ask my wife. This isn’t about perfection, it’s about intention.
I do have a few life hacks that I’m implementing that are very simple and extremely powerful. The key is doing them today, not tomorrow..
Stock pickers think in long-term CAGRs. We all want to compound our capital at high rates because it’s how we are ultimately judged.
We are always looking forward 1-2-3 years and estimating what a business will look like in the future. When you know a business intimately and build conviction those future returns feel so real. We can smell, taste, even envision spending those returns. We can feel our ego swelling from the accolades we would receive from achieving those returns.
The worst part of investing is wishing time goes faster so you can get to your returns quicker. We all make this mistake. Ironically, doing so distracts us from the work that is necessary today to achieve those high returns. We live in the future, instead of the present.
Here is the secret.
When you do the work today…
When you read the earnings transcripts today…
When you do those key word searches today…
When you read the press releases and filings today…
When you set up the expert calls today…
When you have that hard conversation with a CEO today...
When you do the financial modeling today…
When you set a high standard for your business today…
When you hug your children today…
When you tell your spouse you love them especially when you don’t want to… today
When your kids see you chasing your dream today…
When you call your parents today…
When you apologize today…
When you forgive today…
When you get on your knees and pray to your God today…
When you do these things today, you don’t have to worry about tomorrow.
The secret to compounding your family, your relationships, your faith, your dreams, your business and your portfolio – it all starts and ends with taking care of today. This is how you live an abundant life. Being present and living today to a high standard.
Don’t get distracted by the millions of things that are trying to make you mediocre.
When you take care of today, tomorrow takes care of itself.
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