Stalking 10 baggers

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Justise
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Stalking 10 baggers

Post by Justise »

I was selling many of my books on fianance and investing. Peter Lynch's 2 books were on the hit list. I flipped through and saw the heading - Stalking 10 baggers. It has been quite some time not thinking of 10 baggers.

I thought it would be a good idea to seek input from smart & savy investors from this forum for inputs of potential 10 baggers for me to do some stalking. Kindly give suggestion of potential 10 baggers. Give your DD inputs and reasonaings for the potentials.

I met 1 guy who got a 20 bagger from pre-listing investment in startup before listing as income trust and did DRIP and leverage, so it wasn't surprise that it was a 20 bagger. I knew, because the stock itself on the 10 bagger trijectory after listing. But this type of opportunity is few and far in between having to know the management quality too.

Any suggestions and input will be highly appreciated.
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kcowan
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Re: Stalking 10 baggers

Post by kcowan »

I would vote for YLO! Of course you could lose it all. But that is what makes for 10-baggers...make sure to have at least 10 of them to spread your risk.
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adrian2
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Re: Stalking 10 baggers

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kcowan wrote:I would vote for YLO! Of course you could lose it all. But that is what makes for 10-baggers...make sure to have at least 10 of them to spread your risk.
The question was not about 10 beggars! :P
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kcowan
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Re: Stalking 10 baggers

Post by kcowan »

Oh sorry! I knew my speed reading would trap me eventually! :rofl:
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Re: Stalking 10 baggers

Post by EmperorCoder »

Unless you have a very long investing horizon, I think you cannot expect to find 10-baggers by looking at well established companies with proven business models. Those already have their growth potential priced in.

You have to be looking for businesses that are on the verge of a major shift in their business model, and pray that it will pay off. It could be a spectacular turnaround (Apple), or a technological breakthrough (biotechs) or discovery (exploration mining). Either way, there'll be a whole lot of risks involved. It's either hit or miss: you lose everything most of the time, and once in a while you hit a 10-bagger. Your success will depend on your ability to trump the probabilities.

For my part, I only had one 10-bagger in my whole investing life (~7 years), and I realize I have been very lucky. Most of the time, you will not commit a large portion of your portfolio because of the risks involved. Hence even a successful 10-bagger might not add that much alpha to your results.

I find much more good stocks when I lower my expectations. There are a few stocks I own that I believe could very well double or triple in the next 5 years, without the risk of going bankrupt. I am much more comfortable with that level of risk/reward ratio. Otherwise it feels like playing casino.
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Re: Stalking 10 baggers

Post by OptsyEagle »

Even Peter Lynch said that all of his 10 baggers were complete surprises to him. I agree that it is very difficult to identify them in advance. I do think that when I look over my 10 baggers of the past, they all were valued at less then $500 million when I bought them and traded at around 5 or 6 times earnings or less. I probably figured when I bought them that I could get a double out of them but as the future unfolded, things just got better or put another way, I just got luckier.

Another thing that happened with all of them is their rise was not necessarily meteoric, which allowed me to consider them undervalued all the way up. If not, I would have sold them a lot earlier. The only exception was a tech stock that luckily got caught up in the tech mania of the late 90s and the 10 fold increase came fairly quickly. Even it, if it wasn't priced for bankruptcy when I bought it, I doubt I could have hung on to that one all the way, either.
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Re: Stalking 10 baggers

Post by brad911 »

YLO isn't a bad suggestion, just I would buy their preferreds rather than the commons.

If they cancel the preferred dividend then their pretty much saying the company is done as they'd never be able to raise capital in any cost effective manner again.
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Re: Stalking 10 baggers

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I got into YLO at $.21 on a $1k mad money bet. I'm in for the 10 bagger or the total loss.
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Re: Stalking 10 baggers

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brad911 wrote:YLO isn't a bad suggestion, just I would buy their preferreds rather than the commons.
+1 for YLO.PR.A instead of YLO
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Re: Stalking 10 baggers

Post by Springbok »

brad911 wrote:YLO isn't a bad suggestion, just I would buy their preferreds rather than the commons.

If they cancel the preferred dividend then their pretty much saying the company is done as they'd never be able to raise capital in any cost effective manner again.
It may very well be "done" already, but that was an interesting suggestion.

Had $600 in my TFSA doing nothing. How long before I get my 10 bagger ;)
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Re: Stalking 10 baggers

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Springbok wrote:It may very well be "done" already, but that was an interesting suggestion.
James Hymas wrote:Another factor, for the year and for December, has been the performance of the YLO issues. These performed poorly in December and reduced the fund’s return for the month by about 36bp. I continue to be surprised at just how poorly these issues are surprising: I will certainly agree that YLO was never the best of all possible credits, and will also agree that their financial position has deteriorated over the year – but the company remains significantly profitable (on an operating basis) and cash-flow positive; but the preferreds are trading as if they are on the steps of bankruptcy court.

According to me, the worst-case realistic scenario for YLO is not bankruptcy court, but a reorganization in which the bond holders take over the company. This will be bad news for the common shareholders, and for holders of the two issues which can be converted by the company into common (YLO.PR.A and YLO.PR.B), but the prospects for the two FixedResets (YLO.PR.C and YLO.PR.D) are much less clear even given further financial deterioration and angry bondholders.
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Re: Stalking 10 baggers

Post by kcowan »

I suppose that implies that my convertibles are safe, IF James is right.
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Re: Stalking 10 baggers

Post by thesheet322 »

I haven't had a 10- bagger - yet, but I am close so perhaps I could help you.

Aim for companies that are hard to price such as non-producing resource companies before they have a feasibility study done or companies that have
a few pipelines for growth such as a new drug or technology.

Crave volatility on the downside. These small companies ALWAYS have big corrections ....40%+ isn't uncommon.
Look for good management based on previous companies they've run. A google research of key names should bring up good data.
Rob Mcewen of Goldcorp has started a couple of companies. Past success = Future success?

I bought a small silver company called Aurcana for 8 cents after the 2008 collapse, the company was priced for oblivion but they were a producer unlike most junior companies so I bought in. I holding out for it to become a 250 bagger. I even took delivery of share certificates to prevent myself from selling too early.

Cheers and goodluck

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Re: Stalking 10 baggers

Post by Justise »

adrian2 wrote:
kcowan wrote:I would vote for YLO! Of course you could lose it all. But that is what makes for 10-baggers...make sure to have at least 10 of them to spread your risk.
The question was not about 10 beggars! :P

The guy who got a 20 bagger or more was because he was invited to invest in a startup. When the company got traction, they decided to IPO. Obviously, it is always IPO at a premium and it was IPO as income trust. Knowing the company background, he continued to add in even with bank’s money. When I asked him which company was that, he told me the entity which was on my radar screen and it was already a 10 bagger since IPO. So I knew he wasn’t fooling me. According to him, he made millions, which I believed. But he has to learn to take profit and to de-lever to live happily ever after.

Having said the above, I think to find 10 baggers, the starting point has to be in venture exchange penny stocks where some of the ‘unpolished diamonds’ are buried.

Adrain2, if you were to stalk 10 beggars by grooming them as their manager, some of the beggars may possibly turn into 10 baggers returns for you. :lol:
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Re: Stalking 10 baggers

Post by thesheet322 »

I have had a couple of ten-baggers, and hopefully more on the way.

Only put 10% max of the money set aside for speculation into any one stock.

When (if) the stock doubles, sell half and let the rest ride. You now have not lost any money (theoretically) even if stock goes off the board.

I agree with other posts talking about looking at small companies that no one hears about yet may have good management and a good resource/idea/tech etc.

If you hear about a company, you could do a google search of company key officers to see what they have done in the past. The company website is a good resource, but i'd look further... Also google search the name of the idea, resource etc. There might be news

Embrace volatility! Small and Micro-cap stock prices go up and down way more than larger firms. Wait for a huge pullback 40% not uncommon. Don't bother with stop losses either, the stock prices are too volatile, you will be stopped out and the price will probably shoot right back up again...

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Re: Stalking 10 baggers

Post by kcowan »

thesheet322 wrote:Only put 10% max of the money set aside for speculation into any one stock.

When (if) the stock doubles, sell half and let the rest ride. You now have not lost any money (theoretically) even if stock goes off the board...
And don't get upset when only one or two of them perform for you. That is the nature of such speculation.
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Re: Stalking 10 baggers

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I think you'd be better off 10* leveraging a double at the right time. Just about every boring bank doubled off the lows. Try buying some call options next time. Or find something overvalued today and buy some put options. The good thing about put options is volatility increases at the same time as intrinsic value.

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adrian2
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Re: Stalking 10 baggers

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newguy wrote:Try buying some call options next time. Or find something overvalued today and buy some put options.
I have not been able to consistently make money buying options; I much prefer selling them, both puts and calls.
newguy wrote:The good thing about put options is volatility increases at the same time as intrinsic value.
IMO, this is one more argument for being a seller of puts. As a stock goes down, usually volatility increases and therefore time value goes up, too. If you have enough margin and a strong stomach, it's a good time to sell the puts.
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Re: Stalking 10 baggers

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adrian2 wrote:IMO, this is one more argument for being a seller of puts. As a stock goes down, usually volatility increases and therefore time value goes up, too. If you have enough margin and a strong stomach, it's a good time to sell the puts.
You're right - a seller after a decline, but that means a buyer before the decline or after the rally.

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Re: Stalking 10 baggers

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newguy wrote:
adrian2 wrote:IMO, this is one more argument for being a seller of puts. As a stock goes down, usually volatility increases and therefore time value goes up, too. If you have enough margin and a strong stomach, it's a good time to sell the puts.
You're right - a seller after a decline, but that means a buyer before the decline or after the rally.
In my experience so far, it is easier to "buy to close" puts you have sold before, as opposed to "buy to open" puts in anticipation of a decline. YMMV.
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Re: Stalking 10 baggers

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adrian2 wrote:In my experience so far, it is easier to "buy to close" puts you have sold before, as opposed to "buy to open" puts in anticipation of a decline. YMMV.
By easier you mean more profitable. I can't imagine the computer keys are harder to push. And as far as ymmv, you're right - it's part of your nickels in front of steamrollers method. IMO you're more likely to lose a 10 bagger than make one as an option seller.

If you always sell options you are making the bet that future volatility is always lower than IV or you're making directional bets with a lower expectancy and higher costs than trading the stock directly.

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Re: Stalking 10 baggers

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newguy wrote:By easier you mean more profitable.
Yes.
newguy wrote:IMO you're more likely to lose a 10 bagger than make one as an option seller.
I've never aimed for a 10 bagger.
newguy wrote:If you always sell options you are making the bet that future volatility is always lower than IV or you're making directional bets with a lower expectancy and higher costs than trading the stock directly.
I like to go with the Stones lyrics "Time, Time, Time is on Your Side. Yes it is!" and profit from the time decaying of options, as opposed to making a directional bet. I don't so much anticipate future volatility changes, as my crystal ball for that bet is almost as cloudy as for divining the future stock direction.
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Re: Stalking 10 baggers

Post by Justise »

I think most of the stalkers of 10 baggers got crushed in 2008/9. No daring guys left?
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Re: Stalking 10 baggers

Post by jimmyjeblonski »

Agree you need to spread your risk when going for these. I run a conservative dividend portfolio for the most part but I have three speculative stocks at the moment, mostly just for the fun of it. After all, watching RY can put you to sleep...I would go with Innovative Composites International Inc. (CVE:IC) as the most likely to ten-bag for me. Is it kosher to actually mention a speculative penny stock on a board like this or does that make one a spammer...I probably should have inquired about that first!
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Re: Stalking 10 baggers

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jimmyjeblonski wrote:Is it kosher to actually mention a speculative penny stock on a board like this or does that make one a spammer...I probably should have inquired about that first!
It is not against the rules, but don't take it personally if you feel relatively unloved. You may want to start a stock thread specifically on 'penny stocks'. That way, one does not have to second guess whether a poster is talking about penny stock or not.
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