(Sorry for those formatting errors in the above - Thought I had edited them within the three minutes - but doesn't time fly !)
The Marcus Padley article reminds us that there is a way to make life-changing amounts on the share market without getting involved in short term trading.
Just "Buy right, and hold on", then "watch like a hawk".
But how do you select the right stock?
I have been "investing" in the share market for about 38 years now. I have had some successes, a few 10 to 15 baggers. I have also done some dough in a few dogs.
About 5 years ago I decided to have a serious review, and set myself some tighter rules to try and get better results. I decided the best way to make some serious money was to cut the number of stocks I held, slim down to just a few that had the potential to be multi-baggers.
Now all I had to do was work out how to identify stocks that had a very good chance to multi bag. You would be surprised how many examples there are. There have been hundreds of 50 to 100 baggers on the ASX over the years, and with the help of some good books, and a bit of time on sorting through the ideas, I developed a plan to sift through a list of potential stocks.
Mr Padley has mentioned some of the Aussie multi-bag performers. Add examples like Sirius (SIR), and PLS in recent times. (I bought into PLS at 3c, then sold at 16c. ! , - saw potential elsewhere)
After a while
I made a very short list of three stocks that had the characteristics I was looking for. PLS was my number two. While I put most of my pooled funds into another (which I have accumulated, and still hold and follow closely), I bought a modest holding in PLS, held for just over a year, then sold to take up my maximum allocation when my #1 stock had a share placement. Well, "a five bagger in one year wasn't bad", I told myself.
Of course, as it turned out, that was just before Pilbara Mining started its solid run to around 70c. It currently holds at 30 bagger status, and in all likelihood will reach a much higher level. But no regrets - it had confirmed my thoughts, and what is life if it's not about learning !
But my first choice is doing OK - It's a 4 bagger now, and has lined up a lot of ducks to be in a solid position as a revolution prepares to disrupt the materials world. Better management would have boosted things, but as the company grows, new skills and new better qualified and experienced leadership (hoped for shortly), should make all the difference. If my expectations are met, I hold enough for this to be life-changing for me and my family.
So, what are the key characteristics of multi baggers?
1. It must be small. Sheer size works against great further growth.
2. It must be relatively unknown, Growth stocks that are already popular may keep growing, but often you have to pay the price for expected growth too many years ahead. You need to get in early.
3. It must have a unique product that would do an essential job better, cheaper, and/or faster than previously, or unique advantages that will deliver a resource cheaper and quicker in the early stages of a commodity boom..
4. It must have a strong, progressive, research-minded management
I have been watching EUC closely for a while now. I have done my checking on the issues raised on this forum., have satisfied myself that it meets the characteristics I look for, and have now taken a position at these discounted levels.
To get set at a level 75% below the serious investotrs who provided the $20 million that will fund the exploration, refurbishment of old workings, and the upcoming program of underground drilling of visible targets, was to me an opportunity not to be missed. It's a plus that there will be no CR (and dilution), for some time.
Yes, I will be watching closely to check if the potential that has been outlined, and seemingly confirmed by recent announcements, is steadily firmed up over the near term. Now that the underground drilling is under way, we shouldn't have long to wait.
But I am no investment advisor, so please do your own thorough research.
More detail on those four key indicators, and how they relate to EUC in following posts.
(20min delay)