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What is a Ten-Bagger?
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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?
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I would have, but I was lazy and chose not to deal with transferring money. When the market was really low in March 2009, I was thinking of buying a stock that was $0.23. Right now it’s at about $1.86, but was up to over $3 at one point.
i won the stock market game we played in economics in high school with kmart. when they went bankrupt their stock fell to something like 15-25 cents a share and i sold 10,000 fake shares at around $1.20. huge fake dividends haha
Too bad it was only a game.
I bought 14000 shares of Infineon in March 2009 at $0.65 and sold it last month for $6.59.
Other than the aforementioned NFLX that I purchased after Stock Advisor recommended it no. I do have a 3 bagger in Chipotle and a few other 2 baggers
How long have you been a Stock Advisor subscriber?
I originally thought the title of this post was “What is a Tea-Bagger”. I was confused until I read it a second time.
No ten baggers here. Sure would have been nice to get in on netflix at the beginning!
Ditto when I first looked at it.
Bill Snider
I bought McDonald’s stock in 2004 or 2005 (can’t remember) for about $17 per share. Its at $73 today. 3 bagger i guess is the best i’ve done. Most of the time I get greedy or scared and take my profits
I have been a singles hitter all my life. That is a single per year. It added up all those years to a nice cushy retirmenet.
Bill Snider
I don’t have a 10 bagger. I once had a 5 bagger
but I sold the stock when it hit that point.
I bought Ford in March 2009 when it was 1.91 and now it runs around 13. That would be a 7 bagger. Unfortunately, i sold a lot of it when it got to 5 or 6 but i did keep 100 shares.
The reason i bought it because they interviewed the Ford executive (last name Ford) on NPR and I was just impressed with his answers
In order to have a lot of ten-baggers you probably also have a lot of strike-out-swinging losses.
Bill Snider
@billsnider – yeah but you can only lose 100% in the worst case scenario – but you can make a lot more than 100% – even then its pretty rare for a company to go bankrupt and you lose 100%. One 10 bagger can make up for a lot of strikeouts.
Nice! I had been wondering what this term meant.
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