My Investment Strategy
If I could invest in only one strategy for the rest of my life, it would be...
If I could invest in only one strategy for the rest of my life, it would be hunting for 100-baggers.
It's the most lucrative, time-tested strategy to absolutely demolish the index.
Buffett, Lynch, Munger, and countless other investing legends all found success in identifying these compounding machines early.
What Is a 100-Bagger?
If you're reading this article, you probably know what a 100-bagger is, but just to refresh, here's how it works:
A 100-bagger is a stock that returns 100x your initial investment.
That means if you put $10,000 into a stock and it becomes a 100-bagger, you'd have $1,000,000. It's the holy grail of investing – turning relatively modest sums into life-changing wealth.
In short, finding 100-baggers is about identifying extraordinary businesses while they're still small, affordable, and have massive growth runways ahead.
Why Does It Work?
Most businesses won't ever come close to being a 100-bagger. And this makes sense. Think about it – to grow 100x, a company needs to have the perfect combination of small initial size, extraordinary returns on capital, competent management, and a massive market opportunity.
So why do 100-baggers work? Because the magic of compounding is real, and markets frequently underestimate just how powerful it can be over long periods.
100-Bagger Criteria
Here's my criteria for an investable 100-bagger candidate:
Sustainable, understandable business model: I want a business I can understand. Something you could explain to granny. If the business description is something like "disrupting legacy systems through proprietary blockchain integration solutions", I'll be taking my capital elsewhere.
High returns on capital: I need a business that generates returns on invested capital above 20% consistently. This is non-negotiable. Without high returns on capital, compounding is impossible.
Reinvestment runway: The business must have ample opportunity to reinvest profits at similarly high rates of return. A high-ROIC business with nowhere to reinvest will never become a 100-bagger.
Owner-operator management: I like my 100-baggers to be run by founders or executives with significant skin in the game. They need to think like owners because they are owners.
Strong balance sheet: I prefer businesses with minimal debt or even net cash positions, which provide optionality during tough times.
What We Do
In my experience, the best performing 100-baggers start out as too small to be owned by institutions or too "boring" to be owned by retail investors.
I doubt an investor could build a high return portfolio of 100-bagger candidates in a day or a week. My strategy is to look at companies all day long. For every 1,000 publicly traded businesses, there may be just 1 or 2 potential 100-baggers worth owning. When I find them, I add them to the portfolio.
That's why this newsletter exists.
We will release details of one potential multi-bagger stock each month.
There are simply not enough of these opportunities out there, so we'll only focus on the absolute best candidates we can find. Each stock will meet our rigorous criteria and have the potential to deliver enormous returns over the long run.
In addition to our monthly stock picks, we'll also publish case studies and free content around our investment strategy throughout the year.
For serious investors only, our subscription price is $300 annually or $50 monthly. We're offering a 25% launch discount for early subscribers.
You can get that here if you want:
To be clear: we don't want subscribers who are looking to make a quick buck. We want those who are serious, long-term oriented investors looking to find those exceptional companies that will drive the outperformance of their portfolios for years to come.
Thanks for reading,
Nico
DISCLAIMER: THIS IS NOT INVESTMENT ADVICE. I MAY BUY OR SELL THESE OR ANY OTHER SECURITIES AT ANY TIME. I MAY NOT TELL YOU IF AND WHEN I BUY OR SELL. THESE STOCKS MAY BE ILLIQUID AND YOU SHOULD UNDERSTAND THE IMPLICATIONS OF THAT IF YOU BUY THEM. THIS IS NOT TAX, LEGAL OR FINANCIAL ADVICE. I AM NOT YOUR FIDUCIARY. THIS IS THE INTERNET AND YOU'RE LISTENING TO A GUY WITH A KEYBOARD.
THIS IS THE INTERNET AND YOU'RE LISTENING TO A GUY WITH A KEYBOARD.
Says it all really.