Thank you @TheFintwitPod and @Guy_LeBlanc for this podcast ep about my 100bagger $LULU thread & adding your additional commentary too.🙏
(As mentioned, it's not a recommendation for any stock. The lessons are more important than any stocks mentioned).
podcasts.apple.com/ca/podcast/the…
(As mentioned, it's not a recommendation for any stock. The lessons are more important than any stocks mentioned).
podcasts.apple.com/ca/podcast/the…
I had a lot of fun writing this thread few months ago.
Understandably many folks are not excited about growth Cos now (especially unprofitable ones, even if high quality) but many multi-baggers are born during tough times (if you find/hold high quality)
Understandably many folks are not excited about growth Cos now (especially unprofitable ones, even if high quality) but many multi-baggers are born during tough times (if you find/hold high quality)
https://twitter.com/RamBhupatiraju/status/1436328031367352325?s=20
Below is the summarized version of the 12 pts from that thread.
1⃣ Be open minded : Good ideas can come from anywhere. Develop and slowly expand your circle of competence.
1⃣ Be open minded : Good ideas can come from anywhere. Develop and slowly expand your circle of competence.
2⃣ When sh*t hits the ceiling, the floor falls pretty low. During Bear Markets, stocks can fall far below intrinsic value.
3⃣ Small, growing, profitable, founder led, customer loved is a great combination for prospective companies. Being debt free and no/minimum dilution is an icing on the cake.
4⃣ Starting Valuation matters for most Companies. Valuation can come after Qualitative analysis but shouldn't be ignored altogether because of perceived "quality" or "growth".
5⃣ Stocks go up pretty fast during their recoveries from bottom (in Mar 2009, also seen in Mar 2020). If you wait for the "Macro all clear" signal during bad times (instead of basing the decision on intrinsic value of the business), we can miss a pretty big part of the recovery.
6⃣ Stock returns are not evenly distributed over time. Stocks swing between under and over valuation based on Market sentiment, even for steady/quality/compounding companies, and also due to company specific news.
7⃣ When most people think it's a fad, and it's not a fad, the Business & Stock growth can be spectacular. Yes, differentiating between fad and durable (in the short-term) is not easy. You have to monitor the quality, Brand strength & qtrly results for signs of sustainability.
8⃣ Competition : It's always there. What matters is if/how/how long this company is thriving in spite of competition (either due to quality/management/business model/execution or other factors)
9⃣ Issues are un-avoidable for any Company. Look for evidence that Mgmt teams are managing them effectively during crisis times, solving them from a customer perspective and re-energizing the Company.
🔟 Expensive Valuations can stay expensive for a long-time, while still delivering great returns. If a stock is "over-valued" most of the time, try to understand why that is the case and whether it's deserved for this specific Co (if it's in your circle of interest/competence).
11. No regrets (and expressions of I wish, I should have...). Reflect, focus on learning and then process improvement.
12. Long-term mindset rewards the quality Cos & the patient investors. During bad times, it doesn't look good to hold companies thru big drawdowns, but that is part of the journey especially if an investor has a lot of investing years ahead, sticks to quality & have conviction.
Below were my recommendations on how to find multi-baggers - DON'T begin with the hope of finding 10-100 baggers. That will only get you into trouble and into poor quality companies with hype (or a good story, but no fundamentals).
✔️Instead develop a process (if it fits in your style and strategy) that lets you identify, buy and hold quality companies for the long-term.
✔️Build a Circle of Competence and in identifying great/durable Companies within those sectors.
✔️Build a Circle of Competence and in identifying great/durable Companies within those sectors.
✔️Considering Valuation but in the context of Quality, Growth runway, Management, Financials, Tailwinds, Company Life stage...
✔️Buy them with a clear thesis and know the few important fundamental factors to monitor for the specific company/industry.
✔️Buy them with a clear thesis and know the few important fundamental factors to monitor for the specific company/industry.
✔️Add along the way at various Valuation points as the thesis holds/improves and your conviction goes up.
✔️Being able to hold thru volatility, Bear Markets, temporary Earnings disappointments, and some PR issues as long as they're executing.
✔️Being able to hold thru volatility, Bear Markets, temporary Earnings disappointments, and some PR issues as long as they're executing.
✔️Having a good process, strong stomach and long-term outlook can get us some big winners over time.
All of this are just reflections and what suits my current thinking/process.
Not recommendations, as every investor's scenario is different.
/END.
All of this are just reflections and what suits my current thinking/process.
Not recommendations, as every investor's scenario is different.
/END.
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