100 Baggers: Stocks That Return 100-To-1 and How to Find Them by Christopher W. Mayer

100 Baggers: Stocks That Return 100-To-1 and How to Find Them by Christopher W. Mayer

CHAPTER 1:
INTRODUCING 100-BAGGERS

This book is about 100-baggers. These are stocks that return $100 for every
$1 invested. That means a $10,000 investment turns into $1,000,000.
In this book, I want to show you how you can find them.
I know, I know. It sounds like an outrageous quest with a wildly improbable

chance of success, like setting out to draw a royal flush in poker.
And I would probably have agreed with you not so long ago. But then
I started to dig in and study these 100-baggers. Definite patterns emerged.
Let’s set out what this book will do for you:
• You will learn the key characteristics of 100-baggers. There
are only so many ways up the mountain, and we’ll map out
these paths in what follows.
• You will learn why anybody can do this. It is truly an everyman’s approach.

You don’t need an MBA or a finance degree.
Some basic financial concepts are all you’ll need.
• I’ll share with you a number of “crutches” or techniques that
can help you get more out of your stocks and investing.
• The emphasis is always on the practical, and so there are many
stories and anecdotes to help illustrate important points.

You should read this book if you want to get more out of your stocks.
Even if you never get a 100-bagger, this book will help you turn up big
winners and keep you away from sleepy stocks that go nowhere. If you
like investing in utility stocks, with their limited upsides, then this book
isn’t for you.
This book will change the way you think about investing in stocks.
You will never look at the problem in quite the same way again. I hope it
will energize and excite you about what’s possible.
Before I get to the specifics of how to find 100-baggers, let me give
you some context that helps frame the whole effort.
The story of this book begins in 2011. That year, I read remarks investor

Chuck Akre made at a conference held that same year. (Akre is a great
investor, and we will meet him again in the last chapter.) The title of his
talk was “An Investor’s Odyssey: The Search for Outstanding Investments.”
Here is part of what he said:
In 1972, I read a book that was reviewed in Barron’s and this
book was called 100 to 1 in the Stock Market by Thomas Phelps.
He represented an analysis of investments gaining 100 times
one’s starting price. Phelps was a Boston investment manager of
no particular reputation, as far as I know, but he certainly was
on to something, which he outlined in this book. Reading the
book really helped me focus on the issue of compounding capital.
Also, from Boston, you all know Peter Lynch, who often spoke
about ten-baggers. Here was Phelps talking about 100-baggers, so
what’s the deal? Well Phelps laid out a series of examples where
an investor would in fact have made 100 times his money. Further
he laid out some of the characteristics, which would compound
these investments.
I had never heard of the book. And I’ve read all the investment classics
and many obscure ones. So, I quickly got hold of a copy and began to read.
It became one of my favorite investing books. In December of that year,
I sat down and wrote the following story for readers of my newsletter. It serves
as an introduction to Phelps and the ideas we’ll explore more in this book.

100 Baggers: Stocks That Return 100-To-1 and How to Find Them by Christopher W. Mayer