One of this column’s most successful calls reveals the recipe for a jumbo investment return
Owning a stock that rises 10-fold from your original buy price is an aspiration for most investors. The term “10 bagger” was coined to describe such stocks by American fund manager Peter Lynch in his book One Up on Wall Street. These days, a more modern term “10x” (pronounced “ten ex”) is used by big talkers in Silicon Valley. It’s the same thing, but I like the older terminology.
Owning less than a handful of 10 baggers in your lifetime can meaningfully impact your financial position. And online lottery ticket reseller Jumbo Interactive (ASX: JIN) has now become a 10 bagger for those who bought around the time of its first mention in this column back in October 2012, when it was trading at about $1.20 per share. It’s now a 50 bagger based on the first shares I purchased for my family at 30¢ each (I bought more shares at higher prices as the story unfolded).
It’s worthwhile revisiting the story to see what factors were at play in such a profitable result and to draw out a few key points that might increase our odds of spotting the next 10 bagger.
Original case
In October 2012, I made a case for backing online lottery tickets: “Compared to lining up at the newsagent, or the prospect of a pocketed winning ticket going through the wash, playing the lottery online makes plenty of sense. In the same way those who’ve moved to paying bills online will never go back to lining up for the task at the post office (as my 69-year-old father continues to do, for reasons best known to himself), once people begin playing the lottery online, they tend to stick with it.”
Bu hikaye Money Magazine Australia dergisinin May 2019 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Money Magazine Australia dergisinin May 2019 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
An outrageous, beautiful monopoly
Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.
Drop the anchor to judge value
Buying and selling decisions should be based on where a stock price is going, not where it has been.
Powering the AI boom
Beyond the software and chipmakers, where will the energy come from?
Get into life
Tucked inside super are products that can protect you from life's inevitable uncertainties.
Paths to home ownership
Taking the road less travelled can sometimes deliver unexpected benefits.
Sold! Quick ways to add value
Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.
Money lessons the kids need to know
Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.
Property-investing rules: are they likely to change?
The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.
What's love got to do with it?
A rollercoaster of emotions could be driving poor crypto behaviour.
Are we ready to be cash-free?
Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.
