My notes: 100 Baggers: Stocks That Return 100-to-1 and How To Find Them

I read the book 100 Baggers when I was learning to trade and it improved my perspective and sparked my interest in growth. Chris Mayer discusses the patterns and similarities of 100x companies (100 Baggers) from an investors perspective. They all exhibit growth, consistent high return on equity, mission driven management, strategic reinvestment, and most importantly delivering value to the customer. Thanks to my great friend Cirilo for his unwavering persistence in getting me to learn trading(haha).

My notes:

• GROWTH and delivering customer VALUE is #1

• For investing in a potential 100 bagger, “Coffee can” it. If you have a strong investment thesis, go in and forget about it. 

• Strong moats old competitors at bay and give companies time to grow. 

• Reinvestment in the future. R&D! This might not result in high profits but it could result in huge growth! Think Amazon.

• Owner Operators do best. Naval refers to this in “PRINCIPAL-AGENT PROBLEM It’s a very simple concept. Julius Caesar famously said, “If you want it done, then go. And if not, then send.” What he meant was, if you want it done right, then you have to go yourself and do it. When you are the principal, then you are the owner—you care, and you will do a great job. When you are the agent and you are doing it on somebody else’s behalf, you can do a bad job. You just don’t care. You optimize for yourself rather than for the principal’s assets. Kevin Smith referred to this as “Management by Walking Around” - you have to be a leader that shows up and people need to see that.

• ROE (Return on Equity) which is similar to ROA (Return on Assets). How efficiently is the company using its assets? This can also be used as a metric in how well a company is being managed  

• It seems to be easier for smaller companies 

• P/E ratio expansion is the key to a 100-bagger alongside increasing EPS growth.