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100Baggers

100Baggers

CONTENTS Chapter 1:

CONTENTS Chapter 1: Introducing 100-Baggers..............................................................................1 Chapter 2: Anybody Can Do This: True Stories....................................................... 11 Chapter 3: The Coffee-Can Portfolio........................................................................... 15 Chapter 4: 4 Studies of 100-Baggers......................................................................... 31 Chapter 5: The 100-Baggers of the Last 50 Years................................................43 Chapter 6: The Key to 100-Baggers........................................................................... 75 Chapter 7: Owner-Operators: Skin in the Game....................................................83 Chapter 8: The Outsiders: The Best CEOs...............................................................93 Chapter 9: Secrets of an 18,000-Bagger................................................................ 103 Chapter 10: Kelly’s Heroes: Bet Big..............................................................................111 Chapter 11: Stock Buybacks: Accelerate Returns..................................................115 Chapter 12: Keep Competitors Out.............................................................................121 Chapter 13: Miscellaneous Mentation on 100-Baggers....................................... 129 Chapter 14: In Case of the Next Great Depression..............................................155 Chapter 15: 100-Baggers Distilled: Essential Principles.................................... 169 Appendix The 100-Baggers (1962–2014)................................................................ 191

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.

  • Page 2 and 3: 100 BAGGERS STOCKS THAT RETURN 100-
  • Page 4 and 5: In memory of Thomas W. Phelps, auth
  • Page 8 and 9: 2 100-BAGGERS You should read this
  • Page 10 and 11: 4 100-BAGGERS year by year—that m
  • Page 12 and 13: 6 100-BAGGERS of compounding, to fo
  • Page 14 and 15: 8 100-BAGGERS some new insights, si
  • Page 16 and 17: 10 100-BAGGERS These principles I w
  • Page 18 and 19: 12 100-BAGGERS I have had my share
  • Page 20 and 21: 14 100-BAGGERS fears. The list of r
  • Page 22 and 23: 16 100-BAGGERS The idea is simple:
  • Page 24 and 25: 18 100-BAGGERS Here’s Kerber: The
  • Page 26 and 27: 20 100-BAGGERS (Lowenstein is also
  • Page 28 and 29: 22 100-BAGGERS only when you are in
  • Page 30 and 31: 24 100-BAGGERS earned around $21 mi
  • Page 32 and 33: 26 100-BAGGERS But Biggs was someth
  • Page 34 and 35: 28 100-BAGGERS unlikely, given all
  • Page 36 and 37: 30 100-BAGGERS It seems to me a bet
  • Page 38 and 39: 32 100-BAGGERS He looked at 19 such
  • Page 40 and 41: 34 100-BAGGERS MTY’s path to cove
  • Page 42 and 43: 36 100-BAGGERS Years it takes for 1
  • Page 44 and 45: 38 100-BAGGERS Martelli’s study,
  • Page 46 and 47: 40 100-BAGGERS Another trap is that
  • Page 48 and 49: CHAPTER 5: THE 100-BAGGERS OF THE L
  • Page 50 and 51: THE 100-BAGGERS OF THE LAST 50 YEAR
  • Page 52 and 53: THE 100-BAGGERS OF THE LAST 50 YEAR
  • Page 54 and 55: THE 100-BAGGERS OF THE LAST 50 YEAR
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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    THE 100-BAGGERS OF THE LAST 50 YEAR

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    76 100-BAGGERS about $80 per share.

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    78 100-BAGGERS “That’s exactly

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    80 100-BAGGERS But he has no intere

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    CHAPTER 7: OWNER-OPERATORS: SKIN IN

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    OWNER-OPERATORS: SKIN IN THE GAME 8

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    OWNER-OPERATORS: SKIN IN THE GAME 8

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    OWNER-OPERATORS: SKIN IN THE GAME 8

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    OWNER-OPERATORS: SKIN IN THE GAME 9

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    CHAPTER 8: THE OUTSIDERS: THE BEST

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    THE OUTSIDERS: THE BEST CEOS 95 Eac

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    THE OUTSIDERS: THE BEST CEOS 97 bou

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    THE OUTSIDERS: THE BEST CEOS 99 •

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    THE OUTSIDERS: THE BEST CEOS 101 Le

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    104 100-BAGGERS “The amount of le

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    106 100-BAGGERS The Berkshire Hatha

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    108 100-BAGGERS Next was Canadian f

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    CHAPTER 10: KELLY’S HEROES: BET B

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    KELLY’S HEROES: BET BIG 113 The f

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    CHAPTER 11: STOCK BUYBACKS: ACCELER

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    STOCK BUYBACKS: ACCELERATE RETURNS

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    STOCK BUYBACKS: ACCELERATE RETURNS

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    122 100-BAGGERS houses, items that

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    124 100-BAGGERS has no moat. See wh

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    126 100-BAGGERS The beverage indust

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    128 100-BAGGERS gross margin. “Am

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    130 100-BAGGERS It seems to me a bo

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    132 100-BAGGERS The problem with th

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    134 100-BAGGERS “Boredom”—as

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    136 100-BAGGERS The same kind of ar

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    138 100-BAGGERS How can you deal wi

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    140 100-BAGGERS Market-Research Fir

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    142 100-BAGGERS Many investors watc

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    144 100-BAGGERS Note how the consen

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    146 100-BAGGERS The results showed

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    148 100-BAGGERS ideas often come fr

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    150 100-BAGGERS A similar compariso

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    152 100-BAGGERS this investment is

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    CHAPTER 14: IN CASE OF THE NEXT GRE

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    IN CASE OF THE NEXT GREAT DEPRESSIO

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    IN CASE OF THE NEXT GREAT DEPRESSIO

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    IN CASE OF THE NEXT GREAT DEPRESSIO

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    IN CASE OF THE NEXT GREAT DEPRESSIO

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    IN CASE OF THE NEXT GREAT DEPRESSIO

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    IN CASE OF THE NEXT GREAT DEPRESSIO

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    CHAPTER 15: 100-BAGGERS DISTILLED:

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    100-BAGGERS DISTILLED: ESSENTIAL PR

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    APPENDIX THE 100-BAGGERS (1962-2014

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    APPENDIX: THE 100-BAGGERS (1962-201

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    APPENDIX: THE 100-BAGGERS (1962-201

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    APPENDIX: THE 100-BAGGERS (1962-201

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    APPENDIX: THE 100-BAGGERS (1962-201

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    APPENDIX: THE 100-BAGGERS (1962-201