100 Baggers – Stocks that Return 100 to 1 – Christopher Mayer

This is a summary on the investing book “100 Baggers: Stocks that Return 100-to-1 and How to Find Them”, written by Christopher Mayer. Finding just a single one of these may finance a retirement.

Buy Puppies

  • Look for companies that can mathematically get to 100X
  • Avoid large companies
  • 30% of stocks are in micro caps: this is the focus
  • Not look for smallest companies with unproven sales and no customers
  • Research shows that median sales had $175m dollars

Twin Engines

  • Look for growth in all dimensions: sales + valuation multiples
  • High margins are not necessity
  • Look for products that is disruptive in the industry
  • Beware of too high multiples

Owner-Operators

  • “Ultimately, it is the management alone which is the 100X alchemist. And it is to those who have mastered the art of evaluating the alchemist that the stock market rewards with gold”
  • Question whether if the owners have the right incentives

The Coffee Can Portfolio

  • Pick the best stocks, and put them in the coffee can (patience)
  • Need at least 6+ years to get to the bagger status
  • Stocks that don’t move often gets sold because it is boring
  • “The stock market is a device for transferring money from the impatient to the patient”

Ignore the Macro Analyst

  • Ignore feds
  • Ignore presidents
  • Ignore China
  • 100 baggers seldom care about the macro environment