Definition and Examples of Tenbagger Stock
How Tenbagger Stock Works
Tenbagger vs. 100 Baggers
What Does This Mean for Investors
Definition and Examples of Tenbagger Stock
A tenbagger stock is one that returns 10 times the initial investment for investors. This means a 1000% return on investment. The term “tenbagger” became popular thanks to investor, money manager, and author Peter Lynch in his book “One Up on Wall Street”. Investing in types of growth stocks that return 1000% for investors is one of the ways individual investors can amass long-term wealth. Let’s learn exactly what a tenbagger stock is and how to find this type of stock.
How Tenbagger Stock Works
Peter Lynch’s philosophy for tenbagger stock investing includes several key tips:
Focus on small-cap stocks
Buy stocks in industries you understand
Buy stocks with quirky names or in obscure/dull industries
Buy derivative stocks
Tenbagger vs. 100 Baggers
Fund manager Chris Mayer published his book “100 Baggers” in 2018. Mayer studied all the stocks that returned over 10,000% for investors and identified common traits.
Clearly, many of the traits that Mayer identified in his book are similar to those Lynch wrote about decades ago. The main difference is that Mayer’s 100 Baggers philosophy focuses on companies that are owner-operated and whose owners also contribute to the daily operations of the company. Mayer wrote that owner-operated companies are key to finding stocks that will deliver high returns over decades.
What Does This Mean for Investors
Investors may want to consider Peter Lynch’s tenbagger stock investment strategy when looking to build their portfolio. It may not be suitable for every investor, and returns are not guaranteed. Before investing in any stock, conduct the necessary research, consult a financial advisor, and ensure your financial situation is sound in case you don’t achieve the results you hope for.
Key Takeaways:
- A tenbagger stock is one that returns 10 times the initial investment for investors.
- Peter Lynch’s philosophy is to invest in small growth stocks that are not receiving much attention from Wall Street.
- Chris Mayer’s 100 Baggers philosophy focuses on companies that are owner-operated and whose owners also contribute to the daily operations of the company.
- Investors may want to consider Peter Lynch’s tenbagger stock investment strategy when looking to build their portfolio.
Disclaimer: The Balance does not provide tax, investment, or financial advice. The information is provided without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and may not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the risk of losing capital.
Source: https://www.thebalancemoney.com/tenbagger-stock-5206744
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