Find 100 Baggers (100x Stocks)! November 24, 2020 issue

【This Week's Video is Here】

https://youtu.be/6_tCAZcTjsU

*The video runs for 22 minutes.

1. Aiming for at least 2x in 3 years (100% or more) as the introduction criteria in this report

As I mentioned in the afterword of the previous report, this time I will share the expected return I seek in stock investment. As noted at the outset, my basic approach is to look for stocks that will double in 3 years and hold them as long as the story does not change.

Why 2x in 3 years? As you can see in the table below, to achieve 2x in 3 years, you would need an after-tax return of about 26% per year.

[Calculation with principal 100]

If you continue 2x 3 times over 9 years, and then achieve a 26% return in the next year, the initial 100 would become 1,008, achieving a 10-fold increase in 10 years.

So is there any basis for this target? To be honest, there isn't a very strong basis, but I set the annual target return at 26% based on the following three points

.

① The criterion to be in the top 10% of professional fund managers is said to be a 20% annual return, so I want to achieve a return that is even higher than 20% by another 20%.

② Small-cap stocks can double in about six months, and even if timing is slightly off, I have frequently experienced a 2x rise over three years, so I believe it can happen again.

③ Growth stock investing involves pricing in future performance multiplicatively, so if a company has 20% growth in revenue and profit, and popularity doubles, considering three-year performance, revenue/profit growth would be 72.8% increase (172.8%) × popularity doubling = stock price potentially 3.45x. Since the target 2x in 3 years corresponds to only about a 58% rise, even with some fluctuation in popularity, I believe the target is achievable.

That is the reason.

Please refer to the PDF file for the continuation.