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Multibaggers and Compounding – Their differences
By Create Wealth Through Long-Term Investing and Short-Term Trading  •  September 9, 2009
[caption id="attachment_2152" align="alignright" width="150" caption="Photo by goincase"]Photo by goincase[/caption] Some investors or intelligent speculators use Buy and Hold strategy to get multi-bagger stocks if they are right. Where can we probably find multi-bagger stocks? 1) Penny stocks - high risk, high return 2) Speculative stocks - high risk, high return 3) Severely Undervalued stocks - low risk, high return It is difficult for the Magic of Compounding to work its magic in a Buy and Hold strategy even with dividends re-invested as dividend income is too small to have any impact. Do you have that type of risk appetite for high risk, high return? If you don't, then Option 1 and 2 are out for you. You are left with Option 3. With Option 3, you believe that you are smart enough to find severely undervalued stocks while the rest of the market players have missed them. Do you believe that on the pavement there lies a $50 note, and everyone stops and looks carefully at it and then walk away without picking it up as he/she concludes that it is a fake $50 note. But, you are so smart to realize it is a real $50 note, pick it up and put it in your pocket and happily walk away. How often can such things happen? The Market is never short of smart people. Comparing to finding the potential multibagger stocks without taking too much risks, it is probably easier to let the Magic of Compounding works its magic for you and over time you will have the similar multi-bagger effect. For example: Read more...
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By Create Wealth Through Long-Term Investing and Short-Term Trading
I am 62 yrs old uncle living in HDB heartland who has achieved financial independence @ 56 and finally retired @ 60 from full-time job as employee on 1 Oct 2016. Single household income since 1995 with three children. Eldest son and daughter are now working and youngest son still in his 3nd year Uni in SUTD. I have been doing long-term investing and short-term trading in Singapore stock market only since Jan 2000 so I am that Panda or Koala in the investment world; but I am still surviving well in the wild. I am now executing my Three Taps solution model to maintain sustainable retirement income for life till 2038. Cheers!
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