Now Live: All 3 Multi-Bagger Masterclasses

23rd Nov '23 by Lawrence Judd

22 comments 5001 reads

In the webinar launching our multi-baggers research, we announced that we would be creating a selection of subscriber-only masterclasses designed to help you gain a deeper understanding of multi-bagger traits and uncover the stock market stars of the future.

UPDATE: All 3 masterclasses are now available. You'll find a link to the dedicated page at the bottom of this post.

Across these masterclasses, you'll learn:

What powers long-term compounders
How to understand the key financial drivers of multi-baggers
The power of multi-bagger traits
How to ensure compounding can be sustained
Identifying “Moat Factors” and signs of weakness
The importance of strong capital allocators in the management of a business
Which screening rules you can use to help you identify potential multibaggers
How to read traits of compounders on the StockReports
Plus: A list of useful resources for intelligent investors

Ask your questions for the Q&A webinar.

After the last masterclass is published, we'll be running a live Q&A webinar dedicated exclusively to answering your multi-bagger questions. If you have any questions, please leave them in the comments below so we can collate them for the Q&A.

If you have any other feedback on the first masterclass, we'd also love for you to share that in the comments of this post.

Accessing the masterclasses

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Gnome2

24th Nov '23

What a great introduction to the Multibagger series. Thank you Ed and all your team for digging deep into a subject close to all of our hearts. When you've been investing for a while, there's so much that you pick up from your own experiences, but unless you review it regularly it's easy to lose sight of what really matters. It made me take a close look at my own portfolio to see how it measured up against the criteria that your research highlighted. I hold one or two of the shares mentioned, but I thought I'd highlight another that seems to tick a lot of the boxes, James Latham James Latham (LON:LTHM)

It's a classic “family” business, run by various members of the Latham family and with a long history. That means they don't dilute the shareholders and pay a decent, but not excessive, dividend. The divi is well covered and they plough back a lot of the profits into growing the business. They've made some smart acquisitions and have grown the revenue of the building significantly over the last few years. They were able to ramp up profit margins during Covid due to the supply chain issues but these are returning to more normalised levels. I do think there's scope for improved margins over time as they have a strategy to increase sales of more value-added timber products such as architectural mouldings. To give an idea of the level they work at, they supplied the timber panels for the Stirling prize winning Magdalen College project in 2022.

Something that struck me recently was how few Institutional Investors there are listed in the major shareholders, just Close Brothers and Shroder Investment Management with relatively small holdings. It's almost like it's been overlooked by the Institutions. If it gets on their radar at some point, I could see that as being a catalyst for a move up in share price.

Obviously, Lathams is a cyclical business and it's sold off a little recently, but I think it's one for us to keep an eye on. Let me know if I need to de-mist my rose tinted specs.

lemming1

Those links are taking me to the home page

SCI20

Yes there is a problem with the links on my iPhone but the links work on my Mac.

Rusty2

On my iPad it goes to the home page.

Gimmers

A brilliant masterclass. Thank you Stocko team!

raigersfield

25th Nov '23

James Latham is a nice business up 45% over 5 years. If you want a real growth business try Novo Nordisk or Cerillion….

MichaelFBS

I watched this live but haven't had the time to re-watch but will do so.

Thank you Ed and the team.

A couple of bits of research that maybe of interest and add to people's knowledge of what may make the next multi-bagger. (To clarify these are not lists of what the researchers believe will be the next multibaggers).

The first piece of piece of research is from Jenga Investment Partners, which I had not heard about until I watched Ian Cassel's keynote at Small Cap Discoveries 2023.

The Jenga research "Global Outperformers" can be foundt at: https://www.jengaip.com/global...

The second piece is olders from Alta Fox Capital:

The Makings of a Multibagger - https://static1.squarespace.co...

My personal takeaway from this and Ed's research is that I am still not convinced that one can quantitatively pick and then have the patience (and the stomach) to hold a mulibagger (by that I mean at least a 10+ bagger).

By way of example if I start with 20 stocks with a 5% allocation to each and 19 of them grow at the rate of 8% a year (and that is being VERY generous to your other 19 picks) but one of them is your sort after 50 bagger. In 20 years the 50 bagger will be 36% of one's portfolio and 41% of your gains. Would it be even good portfolio management to just sit there and leave it to grow to such a large proportion of one's portfolio?

Also note than since Ian Cassel's key note, where he uses the example of Xpel (NAQ:XPEL) the share price has dropped from $76.35 to $46.78 in just six weeks (that's nearly 40%). That's 17% of your entire profits for 20 years. If that was my putative 50 bagger above could you really stomach that sort of drawdown?

This gut feeling but would welcome other peoples thoughts, expecially from anybody who us done it e.g held say Games Workshop (LON:GAW) (I hold but not from 2013!) or JD Sports Fashion (LON:JD.) for 10 years.

Regards

Michael.

In everything I have read on the subject of multibag investing I have seen no reference to where someone sits on the wealth scale. If you have asset wealth to begin with or are paid a high salary both your ability and mindset towards allowing a share to grow exponentially is far more likely than a person starting from a position of low wealth and or low salary.
The assumption must be that multi bag profits are surplus to a persons needs over a 10-20 year period. I find this to be unrealistic.

26th Nov '23

Ed’s presentation and masterclass on the process of finding stocks that can potentially multibag was excellent and if adopted could increase portfolio outperformance significantly. However to hold a share in a “coffee can “ is so much easier to do and promote if you have the wealth of Warren Buffett.

intuitive6191

"My personal takeaway from this and Ed's research is that I am still not convinced that one can quantitatively pick and then have the patience (and the stomach) to hold a mulibagger (by that I mean at least a 10+ bagger)."

Michael - this is pretty much spot on in my view for the private investor, who will probably get trigger happy on the sell button long before a multibag. I did OK with Cedar in the tech boom but sold well before the peak. Also missed Next at about 10p when David Jones came onboard, but even if I had bought, I would have sold well before £60.

Also reminds of the recent Wired story where they record the story of a guy who lost his password to Ironkey where he had stored bitcoins he had been given as a part payment for making a video in 2011 titled " What is Bitcoin" Having no access to his cold storage he obviously couldnt sell. The value is now something in the order of 240 million. I doubt he would have held this long had he access to the Ironkey.

It's an intriguing story on many levels....

https://www.wired.com/story/un...

27th Nov '23

Michael,

I think you make a good point in questioning the sense in holding a multi-bagger to the extent that it dominates your portfolio. I had that exact dilemma myself and did nothing about it. I watched the bags disappear one by one until it no longer seemed a problem!!

It's interesting to see that Apple currently makes up about 50% of Warren Buffett's BH portfolio. Does he actually have a plan for exiting a $150 billion position?

28th Nov '23

I fortunately (or unfortunately) have never been in that position.

On Buffett (Berkshire Hathaway (NYQ:BRK.B) I hold) I would just say that Buffett recently addressed that very issue. https://uk.finance.yahoo.com/n... it is about 15% of Berkshire:

“Berkshire listed $997 billion in assets at the end of the first quarter,”

And I suspect that undervalues the company.

I am personally comfortable with Berkshire’s holding in Apple (NSQ:AAPL)

Michael

29th Nov '23

Indeed, you're right Michael. Apple is a lesser figure when seen in the context of all the businesses that Berkshire Hathaway run, but it's still 50% of their equity portfolio. I would have thought that Buffett would want to run the equity portfolio as a stand-alone investment fund. Otherwise, it's a bit like saying, "I've got 50% of my share portfolio in one share, but it's okay because, if I include the value of my house, it's only 15%."

Lawrence Judd

Quick update - the 2nd masterclass is now live, titled Competitive Advantages and Capital Allocation. Hope you enjoy!

Andy Howe

2nd Dec '23

Hi Lawrence,

My question is 'how as investors can we protect ourselves from selling out too early'. All of the multibaggers mentioned had share price weakness at some time in the 10 year period to 2023. There are many reasons why a shareprice can fall and selling at the wrong time can severely reduce your multibagging potential.

Ed has even written about protecting your profits but the flip side could also be 'how to minimise your returns'. The law of sod always comes in and if you sell then the share price will recover and continue its upward trajectory and if you hold the share price will continue to fall. Ho hum the joys of investing.

7th Dec '23

Hi all - you can now register for the subscriber-only Q&A session. We'll be going live next Wednesday (Dec 13th) at 11:00 AM UK time. If you'd like to register, you can do so and submit any further questions here.

(Yes, it'll be recorded - the fastest way to get the recording is to register, even if you can't make it live)

DavidMcCabe

9th Dec '23

Hi Lawrence. The link to the multi bagger site, from my android phone, takes me to the homepage. Can this be fixed please.

Brilliant Leader

Hi Lawrence, will you be making available any of the screens Ed used during the last Masterclass? It would be good to be able to duplicate and have a play with them.

ken mitchell

I’ve been lucky enough to have had some 10+ multibaggers as well as plenty that multi bagged but I sold far too soon, but my over cautious tactics didn’t mean making the huge profits some dream of getting when I did get it right.

e.g Anglo American (LON:AAL) bought at just 220p at the end of the extreme Mining bear market in late 2015 but for reason I can’t remember I soon sold for a tiny profit …ahead of the share 10 bagging in no time. I did the same with Games Workshop (LON:GAW) buying at £4.60 a few years ago and selling for a very modest profit and it’s now around £100 and with dividends already higher than my buy price.

When I do occasionally get it right I don’t get the full benefit of the share or subscription share or warrant 10+ bagging because I have a not more than 10% in any one Investment rule, as any share we hold can suddenly go wrong (e.g Patiserrie Valerie). So I regularly top slice on the way up and often before that investment has got to 10% of the portfolio. Some dream of getting very rich. I just wanted investing to give us a comfortable life style and achieved that years ago so am in the fortunate position of doing this for fun now. Many do dream of finding the multi bagger that will make them ultra rich. That does mean having the nerve to stick with that share with far less top slicing on the way up. I’m not interested in making money for its own sake.Isn’t it for spending, giving and enjoying?

A key way of finding a potential multi bagger is perhaps with my preferred tactic of buying the big market dips and then finding shares or Investment Trusts that have taken a far bigger hit than deserved yet down 80% or more from the peak. Shares always seem to go from extreme overbought at the peak of bull markets and extreme oversold at the bottom of bear markets. The chances of getting a 10 bagger if the share is already way above the low is surely slim??

At the end of the 2008 bear market plenty of small company shares multibagged in no time. I remember David Holding suggesting UNIQ (the former Unigate) at about 4p and buying a small stake and it 10 bagged in just a few weeks.And at the same time I bought a small stake in Blackrock Throgmorton Trust (LON:THRG) warrants and they also 10 bagged in no time too. Braver investors than me CAN find multibaggers like that and stake far more and make a fortune. I also got a quick 10 bagger from KAZ Minerals from my lowest priced buy in late 2015 at the end of that Mining bear market.ITM Power (LON:ITM) was another fluke 10 bagger in 2021. I again top sliced on the way up and sold the rest for what looked a crazy £4.40 as there were no profits and nothing to justify a £1 billion + market cap. Yet it went on to peak at £6.60. It’s now back to 60p and arguably still overvalued.

I’m sure there are similar opportunities right now after the so long UK small company (especially so AIM shares) extreme bear market including some analysed so well on the small cap bb here by Paul and Graham. Outside chance if anyone else bought Good Energy (LON:GOOD) recently around £2. But after averaging up 4 times I’ve already top sliced once at £4.20 …it’s that balance between too cautious or too gung ho again. Remote chance that Future (LON:FUTR) after 80% fall could multi bag?

What IS such a big mistake is hanging on to a big winner when news worsens and then seeing huge gains disappear and even go to losses. I learned that lesson the hard way. Better to take most of the profit and think sod it if selling turned out to be a mistake. We can’t lose taking a profit.

Next to a now useless aside but perhaps of interest to anyone else who cashed in then. I’ve been posting here (as have a few others too) about so many Investment Trusts being superb value. The future big Investment Trust winners probably won’t multibag, but 2 to 5 times is possible for some. Just look at the best 10 year winners even now while prices are so often depressed and way down from peaks.e.g Scottish Mortgage Investment Trust (LON:SMT) and 3i (LON:III) up 827% and Polar Capital Technology Trust (LON:PCT) up 410% and India Capital Growth Fund (LON:IGC) up 406%.

BUT the upside potential is so much smaller than when there were those wonderful Investment Trust warrants and Subscription Shatrs for us to invest in. So few investors took advantage so they are now almost extinct. That’s despite Lord John Lee for one using his influence to get them allowed in ISAs.

I had plenty of 10+ baggers then, but for financial restraint reasons then when our monthly standing orders were more than our income it was usually with very small stakes.

If it all sounds a bit far fetched …..I have an old copy of Warrants Alert with me while posting this, including this about what happened in 1993 after the UK left the ERM. That year only 2 Investment Trust warrants out of the 100 or so then available fell. The AVERAGE again for all the Investment Trust warrants was 222%!!! Many 10 bagged or more. Then in 1999 Atlantis Japan warrants 40 bagged. I held a far smaller Japan winner.

I did get one right this Century. That was Geiger Counter subscription shares bought and posted about on Mike Walters bb at 0.85p when the spread was a crazy 0.75p to 1.50p with my 200000 buy for £1700 was recorded as a sell. They soared 59 times to mid 40s but my ultra caution meant at the peak I had already sold (and the bulk far too soon) all but 30000 of that original stake. Finding multi baggers was so much easier then than it is now.

Nothing of much help in this post as just a weekend ramble.

Paul Walton

10th Dec '23

Will you be researching the US market in the same way?

Now Live: All 3 Multi-Bagger Masterclasses

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Lawrence Judd

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