BC BUSINESS
Saved by @AnmolNarula11

I own 7 stocks that are 15+ baggers (and counting)

Here are 10 traits they all have in common:

 The data:

Stock / # of bags / purchase year:

$AMZN / 15+ / 2010
$FB / 15+ / 2012
$GOOG / 15+ / 2009
$MELI / 15+ / 2011
$CMG / 20+ / 2012
$NFLX / 60+ / 2010
$TSLA / 60+ / 2012
1: Founder-led

$AMZN - Bezos
$CMG - Ells
$FB- Zuck
$GOOG - Page
$MELI- Galperin
$NFLX - Hastings
$TSLA - Musk

Founders tend to be:
+Detail oriented
+Innovative
+Mission driven
+Think long-term
+Have skin/soul in the game

Look for founders!
2: Consumer-facing

All of these companies attract millions/billions of consumers

This eliminates customer concentration risk and enables long-term brand building
3: High sales growth

All of these companies were growing revenue 20%+ BEFORE I bought them

Sales growth is the engine that drives profit growth

Profit growth is the engine that drives stock appreciation

Find companies that can grow sales 20%+ for decades
4: Word of mouth advertising

The best advertising is no advertising

Invest in companies that make products/services that are so good that their customers do all the marketing
5: Category Mindshare

▪️Name an electric car company
▪️Name a search engine
▪️Name a streaming service

The odds are good that you said Tesla, Google, Netflix

Find companies that grab all of the mindshare in an important, emerging market
6: Pricing Power

▪️If $AMZN raised prices, would you notice?
▪️If $CMG raised prices, would you notice?
▪️If $NFLX raised prices, would you cancel?

Find companies that create so much value that they can raise prices and not lose customers
7: Optionality

$AMZN Bookseller ➡️ AWS / Everything Store
$MELI eBay of Latin America ➡️ PayPal of LatAm
$NFLX DVD-by-mail ➡️ Streaming
$TSLA Sports cars ➡️ Energy Storage

Look for companies with innovation & experimentation built into their DNA
8: Massive opportunity

▪️Facebook wants to connect the world
▪️Netflix wants to entertain the world
▪️Tesla wants the world to switch to sustainable transport

All of these opportunities are measured in the hundreds of billions (if not trillions)
9: Widening Moat

All of these companies widened their moat over time

Moat sources:
▪️Network Effect
▪️Switching Costs
▪️Low-cost production
▪️Brand

Look for companies that are building a lasting competitive advantage
10: Distinctive cultures

▪️ $NFLX 125-slide culture presentation

▪️ $TSLA attracts people who believe deeply in Tesla’s mission

▪️ $AMZN culture celebrates experimentation

Great cultures attract great employees

Find cultures that stand out!
Important:

To earn multi-bagger returns I had to hold through:

▪️50%+ declines
▪️Short-seller reports
▪️Public Relations fiascos

If my behavior was wrong, I wouldn’t have earned multi-baggers

This is why I always:
Interestingly, aside from $MELI, none of these stocks were “hidden”

I had heard of:
▪️Amazon
▪️Chipotle
▪️Facebook
▪️Google
▪️Netflix
▪️Tesla

YEARS before I became a shareholder

Sometimes, great investments are obvious
What company checks all of these boxes today?

One idea: Peloton $PTON

(All the details can be found in my most recent YouTube video)

https://t.co/wFMwTR292X
Want to screen for these traits?

All of them are covered in my investing checklist

You can download a free copy of it here: https://t.co/HI5T9wZgbw
Enjoy this thread?

Follow me @brianferoldi

You may enjoy all of my other threads on money, investing, & self-improvement

https://t.co/9zUKu1NhAl
Summary:

1: Founder-led
2: Consumer-facing
3: High sales growth
4: Word of mouth
5: Mindshare
6: Pricing Power
7: Optionality
8: Huge TAM
9: Widening Moat
10: Distinctive cultures

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Here are 15 traits that tell me I've found a great business ⬇️

1/ Recurring Revenue

Types:

Business Services $MCO
Contracts $AMT
Consumables $MNST
Exchange $MKTX
Franchise $WINA
Membership $TDOC
Platform $ETSY
Razor/blade $DXCM
Real Estate $STOR
SaaS, PaaS, IaaS $TWLO, $NOW, $FSLY
Subscription $NFLX
Tollbooth $BIP


2/ Recession-Proof Demand

Great companies sell products/services that are in-demand in good times and bad

That allows them to grow regardless of what is happening in the broader economy


3/ Organic Growth

"Organic" growth: Growing by increasing sales of internally developed products/services

"Inorganic" growth: Growing from mergers & acquisitions

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1⃣ ALWAYS live below your means


2⃣Developing a long-term mindset

is the foundation of financial success


3⃣In the beginning, your savings rate is all that matters

Eventually, your investing returns are all that matters

Focus your time accordingly


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The price is ~10 years of hardcore saving/investing
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@BrianFeroldi
Panic selling once can destroy years of good investment decisions in an instant

but keeping your head on straight when your portfolio is tanking is hard

Here are 13 investing tips/tricks/principles that I use to keep calm when my portfolio is in free fall:

1/ Know what you own and why you own it

You can borrow stock ideas from other investors, but you can’t borrow conviction

You must understand the bull AND bear case upfront, otherwise you won’t have the conviction to hold when the price is going down

Research builds conviction

Conviction enables patience

Patience builds wealth

If a 20% drop shakes your confidence in a business, you didn’t do enough research

2/ Know what drives long-term stock returns

In the short-term, emotions & computer algorithms determine stock prices

In the long-term, profit growth determine stock prices

This is a core investing principle that you must fully embrace

Look at these long-term charts of $MSFT, $HD, and $AAPL

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#irrationalebullience If you want to understand the nature of this asset bubble and the epic capital mis-allocation at it’s heart, look no further than rates. CB’s only tool to push an uber-levered financial system that is highly interconnected through derivatives
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Now, the doctrine of devotion we shall expound.
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