I read +200 pages of this book so you don't have to.
Here are the top 5 lessons I learned: π§΅
Here are the top 5 lessons I learned: π§΅
(1) For a company to become a 100-bagger, it must grow a lot for a long time. It's best if the growth happens in:
- Revenue
- Profit margins
- EPS
The company needs clear plans to grow in its own country or globally. It doesn't always need a big market; it can also do well in a smaller niche.
- Revenue
- Profit margins
- EPS
The company needs clear plans to grow in its own country or globally. It doesn't always need a big market; it can also do well in a smaller niche.
(2) Small companies can grow 50-100 times and still have space for more growth.
So, small companies can become 100-baggers more easily than bigger ones.
So, small companies can become 100-baggers more easily than bigger ones.
(3) A rising P/E ratio and growing EPS are key to a 100-fold gain. But, if a stock's P/E gets very high, be cautious.
In his book, Mayer advises not rushing to sell. Check if your reasons for investing still make sense and if you're comfortable with the stock being overvalued.
In his book, Mayer advises not rushing to sell. Check if your reasons for investing still make sense and if you're comfortable with the stock being overvalued.
(4) For a company to become 100 times bigger, it needs a steady high return on equity to reinvest profits.
Paying dividends reduces capital for growth, so high-growth companies often avoid dividends to reinvest and expand.
Paying dividends reduces capital for growth, so high-growth companies often avoid dividends to reinvest and expand.
(5) Companies run by owners tend to do much better in the stock market for a long time.
When owners have a big stake in a company, they usually care about what shareholders want.
Competent owners who are good at using money wisely often borrow more and spend extra cash during a recession when there are good opportunities.
When owners have a big stake in a company, they usually care about what shareholders want.
Competent owners who are good at using money wisely often borrow more and spend extra cash during a recession when there are good opportunities.
Thread #135 - That's a wrap!
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(1) Follow me @rohaninvestor for more such threads. I write a new thread every week simplifying trading/investing concepts.
(2) Bookmark this thread for future.
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