The Hunt For Potential 10x Returns: 2 Software Giants

The thought of owning a 10-bagger has probably enchanted public market investors for centuries. I became familiarized with the term 'bagger' first when I read Peter Lynch's "One Up On Wallstreet". Peter points out that an investor doesn't need to get everything right, given that the investor gets one investment very right. This can be exemplified with a simple thought experiment: you invest $10,000 equally into ten positions, nine positions lose an average 50% value, and one position appreciates 10x. During your holding period, you will have a portfolio worth 9($500) + $10,000 = $14,500. So, even with the pessimistic assumption that you lose half of your money on nine positions, the picking of a 10-bagger will ...

seekingalpha.com     Jul 08, 2023