I'm talking about 100-200 baggers (without leverage), not multi baggers like 2-10 baggers, that kind of thing is not uncommon since very speculative stonks can 10x in a very short period of time e.g Gamestop, Tesla, etc.
Also Livermore went bankrupt 3 times and he shot himself dead, dying penniless (outside of a 5m trust fund that was untouchable), I dun think he is a fine example of how the average person should invest/trade.
There are very few people who can consistently beat the market over the long run, let alone hit 100-200 baggers (which is likely just luck), its very easy to come to a different conclusion from reading books like "Market Wizards". These people could be extremely skilled (difficult to emulate) or they might have just been very lucky (impossible to emulate in which case), nobody really knows.
if its not luck, then its a skill level beyond your ability. in which case, not much point talking about them as normal investors don't have the skill to emulate them.
More relevant to talk about more "normal" investors and what you can learn from them - so frankly, its more useful if you share the stories behind your multi-baggers, because you are a more normal investor, so maybe we can learn from your thought process.
I totally agree with you. If I'm really so great at individual stock pickings, I will be in Sentosa cove now.
I'm just rrreeeeaaallllyyy lucky......and there in lies the problem, whatever I will be investing next will never match this first two trades I did when I was in my late 20s.... there's no way I can repeat this feat.
And before anyone asked....yes, today is a good day for me
I have identified what needs to be done to get multiple baggers. They are market leaders in some sense. AAPL, BTC, TSLA, now NVDA, etc. Every market cycle has different leaders. Every sector also has their own leaders. Like GME for meme stocks.
Also I solved this apparent divergent paths: a few multiple baggers vs many small gains. Actually they are all along the same path to riches. The gist is this:
- Multiple baggers: You rely more on the market to do the capital appreciation
- Stringing many small gains: you rely more on yourself (because it is alot of work to spot them and trade them repeatedly).
The two paths converge when you trade potential multiple baggers short-term and switch between profit-targeting and trend-following ("investing", trailing stop loss with wide stops). While doing so:
- You don't know a stock you buy can become a multiple bagger until it becomes one. Even though you may guess it can possibly be a market leader, out of many guesses or tries in one's lifetime, only a few may turn out to be so. Thus this is a statistical game of chance which one needs to have some edge that needs to be kept refining through studying.
- You can use leverage (like options) on these picks to turn a simple multiple bagger to 100-bagger.
- The sooner one can identify the stocks becomes a multiple bagger, the more gains can be kept by avoiding selling out too early through short-term trading. The more small trading one does, the slower it is to grow portfolio.
A trader like Qullamaggie definitely snagged several multiple baggers, but not necessarily 100-baggers, in his trading process. This is necessary to avoid the long and arduos task of trading for small gains only.
For technical trading, in the short-term, the purpose of trading for small gains is to
build risk capital for the big move. Because to make big returns, trend-following sometimes requires
wide stop loss and thus enduring bigger drawdowns than trading for small gains.
Here for 2024, I risked all my leftover profits from 2023, because I have already withdrawn some my profits for future living costs and I identified the coming precious metal cycle at the cusp of rate cut cycle. Risk 40% drawdown and gained 90% rewards. If I risk only 5%, then I only gained 11%. This is not a multiple bagger trade wise because it is only standard 2.25:1 return, but a form of leverage by risking bigger $.
But what if the stock I bet on was a multiple bagger, ... then I will have to jump back in and buy back my position upon pullback. But it is not (EQX: the chart looks bad, plus they did another round of financing). Hence, trendfollowing abandoned, and I continue to keep searching.
As for traders who blow up and become insane. well that's too bad... it is no different from those gifted kids who failed as adults. Success is a personal responsibility to work through lifetime to maintain. Resting on laurels and becoming complacent will lead to failure.
Dumb Money investors (Chris Camillo) tries to find multiple baggers through social arbitrage.
Mark Minervini tries to find multiple baggers through some form of CANSLIM stocks that also meet his momentum criteria. In the CANSLIM community, they are always trying to
find tomorrow's market leaders through future potential earnings acceleration and ride them.
In the process, they all have to
discard many failed candidates while ensuring any loss is not destructive. Failure must be designed as part of the outcomes of the plans. Unexpected failure and subsequent major disappointment is a primary factor for psychological breakdowns (insanity).
I recognise that my gains from the GFC were largely luck, and the best I can do is to try to not lose money while waiting for the next lucky break.
I wish I had that skill, of putting down my thoughts eloquently.
