Multibaggers! I think of them as homerun stocks or out-of-the-park stocks.

Nothing feels better than seeing gains that are 2x,3x,5x, and 10x your original purchase price.

Here are general rules for finding the biggest winners based on my experience + theory

/Thread time/

Use the law of large numbers. Look for small to mid cap sized companies.

It is more difficult for companies that are already large to grow much larger.

Be aware, smaller companies require more DD.

A long runway to grow revenue and/or earnings

I look for at least a couple of years of consecutive compounding in either of the above metrics

The company’s market can support continued growth

Or management will find new revenue sources, thus still growing

Moats and defense.

With smaller companies, I am not looking for the super moat of most large caps. It is easy to talk yourself out of a company

But a couple of reasons/competitive advantages why it would be difficult for a competitor to enter the space or compete

Exception management and preferably owner-operators

Owner-operators have skin in the game and are more likely to make better decisions since they are aligned w/ shareholders

Statistically, they outperform

Management is long-term oriented and seems to always be able to execute


I generally look for high growth and an optically low multiple.

If I can get it, I want the pop from earnings/revenue growth and multiple expansion

But it is not always a deal-breaker if the stock is not cheap and growing fast

Price or the multiple you pay is secondary to a company’s ability to grow. But it does matter. Especially in the first 5 years of holding

Look at a lot of past winners. Look at a lot of companies in general

When you turn over a lot of rocks, you get a feel for what’s cheap and what’s expensive.
6 & End/

Still learning (kaizen) as always, but here are the home runs so far: $XPEL, $APPS, $SE

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