10 Traits of the Tenbagger

November 13, 2020

10 traits of the Tenbagger 

“Tenbagger” is a term used by Peter Lynch for a stock that has risen to 10x your purchasing price 

If you get a few of this during your career of investing, you will be legendary 

As we talked about yesterday, different kind of companies must be treated differently.  

However, there are also similarities. Let us have a look at the ten positive signs Peter Lynch has for stocks, regardless whether it is a fast grower or a  turn arounder. 

  1.  The name is ridiculous or dull. Such companies tend to be overlooked, because it just sounds ridiculous.
  2.  It does something dull.
  3.  It does something disagreeable.
  4.  Institutions down own it, and it is not followed by analysists . Such companies haven’t been discovered by the big players, and thus has a huge upside.
  5.  Something depressing about the company. 
  6.  The industry isn’t growing. Stalling markets aren’t that prone to competition, as opposed to high growth industries where thousands of people are consistently thinking about how they can grab a portion of the market share.
  7.  It’s got a niche.
  8.  Reoccurring revenues. Product is subscription that is consumed so the customers are forced to return for more.
  9.  Insiders are buying. Insiders know more about the company than anyone else. For example, when Bill Gates buy in the technology sector, Jeff Bezos in eCommerce or Marc Zuckerberg buys into social media and marketing, just to mention examples, you can be pretty sure these companies won’t go bankrupt 
  10. The company itself is buying back its shares. If a company has fate in itself, it should invest in itself.  

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