When I read Chris Mayer’s book 100 Baggers*: Stocks that Return 100-to-1 and How to Find Them I was mightily impressed. Chris gives examples of hundreds of companies that have risen in value one hundred fold. Even though it sounds too good to be true it really isn’t.
To Chris’s credit, he doesn’t claim the 100 bagger concept as his own. Instead, he attributes the idea to Thomas Phelps who wrote the book 100 to 1* which was the original study of 100 baggers which was written much earlier than 100 Baggers. Chris wanted to write a much more modern version of 100 to 1.
Chris has 10 rules for discovering 100 baggers.
- You have to look for them.
- Growth, growth and more growth.
- Lower multiples preferred.
- Economic moats are a necessity.
- Smaller companies preferred.
- Owner-operators preferred.
- You need time: use the coffee-can approach as a crutch.
- You need a really good filter.
- Luck helps.
- You should be a reluctant seller.
We manage a fund called the YFS Intelligent Wealth Fund which is a global equities fund which invests in seven themes of the future. It has been my stated aim since the launch of the fund just over five years ago to turn the fund itself into a 100 bagger over a 25 years period. Now that is a very ambitious target but not an impossible one. It means we have to average a return of 20% a year net of charges. We follow similar principles to Chris Mayer’s 100 Baggers but use our five-star investment process instead. Read my blog last month on the subject.
Will we achieve my goal? I personally think we will but of course, nothing in life is certain. What I do know is that our investment approach is highly likely to produce excellent long-term results because we have a very robust system modelled on the investment styles of the world’s greatest investors together with our own research and investment approach.
However, our fund will not produce short-term wins. Instead, it is highly likely to produce outstanding long-term performance by investing in great companies and holding them for long periods of time. Of course, a little luck helps (Chris Mayer’s ninth tip above). You know it makes sense.**
Anthony Byrne, Managing Director
If you want to learn more about this topic, please find the link here.
More information about our fund the YFS Intelligent Wealth Fund can be found here: Hargreaves Lansdown or AJ Bell
* The Amazon link is not an affiliate link, Minerva Money Management will not be receiving any commission from Amazon.
**Risk warning
The value of investments can fall as well as rise. You may not get back what you invest. The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction. All information is based on our current understanding of taxation, legislation, regulations and case law in the current tax year. Any levels and bases of relief from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This blog is based on my own observations and opinions.
