What is a Ten-Bagger?

I was reading my latest issue of the Motley Fool Stock Advisor when I saw them use a term I’ve always found entertaining – ten-bagger. The newsletter itself was talking about how Netflix has become a ten-bagger since David Gardner’s recommendation in 2004. The term ten-bagger refers to a stock that is worth 10 times more than its original purchase price, or an appreciation of 900% over the holding period.

The origins of the term are from One Up On Wall Street by Peter Lynch and it’s most often cited by long and hold investors because it’s so hard to do. Before a stock is worth 900% more than what you paid for it, it has to be worth 200% and 300% and 500%. All the while you have to stick with it, before it’ll reach 900%. And when it does become a ten-bagger, that doesn’t mean you should sell it, it’s as meaningless a benchmark as any other (the market has no idea where you purchased it).

The closest I’ve ever come is a hair over 200% on shares of Apple stock I purchased early last year when Steve Jobs took medical leave in early 2009.

Do you have a ten-bagger?


WIN: iPhone Mania Is Ridiculous

$200 iPhone VouchersWhen the first iPhone was released, the sticker price was six hundred dollars. That’s six hundred just for the unit, not counting the monthly plan. A scant two months later, Apple dropped the price by two hundred bones and gave all those suckers early adopters some vouchers to use at their store. And you know what? All those early adopters are still lining up to get their fix. L. Ron Hubbard ain’t got crap on Steve Jobs.

$999.99 Price of iPhone App I Am Rich$999.99 is the price for Armin Heinrich’s I Am Rich iPhone app that does absolutely nothing except flaunt your wealth to the world. It was available for one day until Apple pulled it but that didn’t stop eight people from buying it. Six were from the United States, one was from Germany, and the last was from France. Heinrich pocketed a cool $5,600 for his trouble. Not bad.

75 Days to Sell 1 Million iPhonesIt took Apple a mere 75 days to sell one million iPhones. Seventy five days… that’s 13,333.33 iPhones a day. The scary part is that iPhones flew off the shelves most rapidly after the price drop on September 5th. From September 5th to September 9th (the day they sold their one millionth), they sold 27,000 iPhones a day versus the 9,000 a day they were previously recording.

Now I’m going to go out and buy an iPhone.

 Personal Finance 

WIN: Early Adopters Always Pay

$1848 Total Minimum Cost of iPhone 3GThat’s the total minimum financial commitment to owning an iPhone 3G phone. Nearly two thousand dollars. Add a few more bells and whistles and you’re talking more. If you’re curious about the total cost of owning one elsewhere, CBC News has a cool interactive map you can use to navigate the world. (link courtesy of Loonies and Sense)

1,000,000 HD-DVD Players SoldI don’t know where the number stands now but the announced in January, before HD-DVD knew it lost the format wars to BluRay, that vendors had sold nearly a million HD-DVD players. Those million customers soon discovered they owned a dead format rebranded as “up-sampling DVD players.” Game over. Thanks for your money.

$1.06 Billion Writedown for Microsoft Xbox 360 Technical IssuesEarly adopters of the Microsoft XBox 360, myself included, discovered that the units were experiencing catastrophic technical problems. Later models solved some of the earlier problems and Microsoft increased their warranty to three years and had to take a $1.06 billion write-down in the second quarter of 2007.

$200 iPhone Price DropI couldn’t let Apple off the hook on this one… a scant 68 days after releasing the iPhone for the first time, Apple slashed prices by $200. The 8GB iPhone’s price dropped from $599 to $399. Those who bought within 14 days could get a refund of the difference but the rest had to be happy with a $100 credit at Apple stores. Steve Jobs is too hip and too rich to care about you, but keep on buying his products!

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