The term ‘10-bagger’ was first used and popularised by fund manager Peter Lynch to describe stocks that multiplied in value by tenfold. Christopher Mayer, portfolio manager and co-founder of Woodlock House Family Capital, took this a step further and wrote a book to discuss about 100-baggers.
In his book, 100 Baggers, Mayer studied every company that returned $100 for every $1 invested between 1962 and 2014. The survey turned up 365 companies which was built upon a similar study conducted by Thomas Phelps, a stockbroker and investor. (Coincidentally, Phelps also discovered the same number of 100-baggers between 1932 and 1971 as published in his book 100 to 1 in the Stock Market.)
Without further ado, here are 10 things I gained from reading 100 Baggers: Stocks that Returned 100-to-1 and How to Find Them.
1. A company needs an extended period of high growth to become a 100-bagger. Ideally, a company can sustain