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2 years ago

100Baggers

100Baggers

12 100-BAGGERS I have

12 100-BAGGERS I have had my share of home runs and plenty of disasters. I have spent countless days glued to the computer screen monitoring positions and trades. Over a career of investing and speculating the only real money that I held onto were [sic] in longer-term investments. So my discovery in investing, and advice to younger ones who would endeavor to, [sic] is to study markets and invest in long term enterprises which have the potential to vastly outpace other companies and industries and stick with them as long as the theme is intact. Forget about the trading and use the time you would have spent monitoring the trade with your family. It seems so simple, but few actually ever achieve it. Here is a prime example of what I am talking about: Back in January 1992 I read the Barron’s Roundtable and Felix Zulauf recommended Potash of Saskatchewan (POT) as a unique way to play the China growth story. . . . It all made sense to me so I took a modest position. The stock did quite well, I recall I bought it for $2/share. I held onto it for 3 years and got a 4–5 bagger out of it. I was pretty impressed with myself at my acute market acumen. It stalled out eventually and I sold it around 1996 as I got tired of it treading water. Now mind you the original premise never changed, it was always intact, yet I craved new action. If I had held on until the blow off in 2007 I would have had my 100-bagger. If one had bought even earlier it was a 200+ bagger. So the lesson is one needs to stick to the original theme and if it is intact just hold on. I believe your project is in fact a very achievable objective. One needs to isolate the common threads and place one’s bets on the table after much research and conviction then hold on. That’s a good story, from someone who has won his wisdom the hard way. He hits on many important themes in this book. I’m going to have

ANYBODY CAN DO THIS: TRUE STORIES 13 my 16-year-old son and my 13-year-old daughter read it, so they’ll know it’s not just Dad saying this stuff. Here’s another email: I remember as a kid my dad used to grumble about my grandmother because she would complain that she couldn’t see well and she had cataracts. He would say, well she doesn’t seem to have any trouble reading the fine print in the WSJ when she is checking her Esso stock. That would have been around 1971 and somehow that is still in the recesses of my mind. Now if one thinks this 100-bagger goal is unachievable, just consider as a young kid if I had just started accumulating ExxonMobil back then. It would not have taken a genius or much of a stock picker gene. Just buy the largest oil stock in the world that had been around for a hundred years. . . . Just put your blinders on and keep accumulating over a lifetime. No stress, no white knuckles since it has a very conservative balance sheet, no high wire act. So where [sic] would $1 back in 1971 in Esso be worth today? By my calculations $418 plus one would have been collecting a juicy dividend all those years. Amazing, isn’t it? Everybody has a story somewhat like these. All right, one more, because these are so interesting: In about 1969/1970, when a billboard in downtown Seattle read, “Will the Last Person Turn Out the Lights?” a friend of mine had just sold an apartment house in Seattle and netted about $100,000 after tax. His view was that things couldn’t get any worse for Boeing so he bought 10,000 shares at $9.50/share. Within about 10 years or so he was getting annual cash dividends for almost as much as he had paid for the stock. This had to be a 100 plus bagger with all of the stock dividends and splits over the years. In 2002 I believe he still had not sold a share. Key here is the idea that you must sit still. Think of all the reasons to sell Boeing since 1970: Inflation. Wars. Interest-rate worries. Economic

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