From 1 to 100... PART 3In Parts 1 and 2 we took a high viewed summary of the book 100 Baggers. There were some points I filtered and applied them to our own situation. I always love getting info from multiple sources independent of each other if possible. We have seen this time and time again with multiple studies and even personal evidence from different patients right here at HC.
In the final part of the last major post for me for 2020, we investigate the continuing theme of multibaggers but here in Part 3, I will draw on a different source of information to add further colour to this relevant topic for us as we embark further on this exciting journey.
But before that, how about putting the author Mayer through a test?
THE TESTParadigmers, Christopher Mayer wrote his book on 100 baggers back in 2015. On Page 59 Mayer gave us an example of AMZN. Now Mayer says that to really do well in Amazon you'd have to buy in early and hold, and that also entailed holding through a "soul crushing" 80% decline at one point.
Hmmmm doesn't this bring back memories for us? PAR from $4.50 to $1.08? What's that as a percentage? Would you be amazed that it is very close to the 80%? It's actually 76%. We
ourselves have gone through it too. BUT Mayer goes on to say that there were many opportunities to buy AMZN in these dips over time. He says you could've been up 50 fold since some of these dips and he wrote "Amazon is not done"...
Thompson, another analysts Mayer refers to, quoted at the time that his prediction is that Amazon would get you 31% annualised returns over the ensuing three years. At the time of writing that book AMZN was $427 a share. Mayer concurs with Thompson to even give us, the reader, a prediction of the exact share price within three years of writing his book, the analysis was $969. Like some Nostradamus type character, the prediction came true, to the dollar just under 3 years from writing that statement. They said that AMZN on it's current trajectory would maintain a CAGR of 31%.
Forward to today and AMZN sits at some $3,322 per share. Paradigmers, again I'm not saying that PAR will do the sales AMZN will...all I'm saying is we are early, very early and it's great to be prepared and armed with such knowledge.
(Left click on the above graph if it is too small). Amazon trajectory from time of Mayer's Book to three years after, till now. Remembering the words of @rusty388 Hold hold hold.OTHER SOURCES
I love multiple sources of info, adds weight, independence and de-risks.Ok let's shift gears and source other material...How about this for a quote in terms of investing over the longer term.....
"The average person confuses success with luck. But luck has nothing to do with it. Millionaire success habits do."6This is not some random gamble we are embarking on. As we have recently heard (R&D Day) there is real science behind it, much more of this science investigation from Mozz to come in 2021....with multiple related posts already being formed in my head.
I'M A FOOLI'm a cursory follower of The Motley Fool. Yes I get slightly bombarded with invites and added subscriptions but also yes, there is some good material they produce that is informative and motivational. Yes also their track record ain't too bad but I still apply my Mozzie filters to all the material.Here is a quote from Motley Fool (US) senior analyst who was questioned by the founder, David Gardner:
"What do you do, how do you add value?"
Tim Beyers responded: "I am responsible for finding MMM - Misunderstood Multibaggers in the making."
He went on to say,
"The price may look ridiculous, it doesn't account for the long term potential".
This is so us...imagine, we sit here today with not one, but two IND's....two starts to Phase 3's....and we aren't talking unknown months into the future...we are talking KNOWN weeks. We have a drug like so many drugs out there BUT what sets us apart?... There is very very little evidence for side effects LET ALONE Adverse or SERIOUS/DISASTROUS effects. No I'm not talking a small sample size ...we are approaching some 1000 patients. It's significant. OUR price looks ridiculous...it looks incredulous at these levels...certainly as Tim ventures, it isn't accounting for the long term potential.
Now I'm not saying there is ZERO chance of someone developing something in competition to us, specially when we hit the world en mass, I AM saying we have a great clean bill of heath so far and we also have tens of decades of relatively safe dosing of the drug in a different route to administration already and we have a jump start and at least a decent 5 to 8 year window of opportunity as a minimum...
Tim was then asked, how do you find stocks? In a nutshell, he said the best way he learnt about a stock or a company is talking to people. Paradigmers, this is what we do on a daily basis here at HC...we are talking to each other, we are discussing, we are learning off each other...we even have the great fortune to be able to talk to early recipients of the product right here at HC.
The interviewee then became to interviewer....HE then asked David, what is one of the most important indicators when looking at what stocks to buy?David Gardner (co-founder of MF) stated "one of the greatest indicators about performance is, existing out performance".
Mozz Take - A real winner can keep winning...AMZN at some point was $100 per share...would you, at the time have thought "that's too much, I can't afford that"?...it then promptly went to $500....then $1000....Yes it is harder to buy a few shares at $500. If you did, it's still a full 6X plus more from that late point! AMZN isn't done going up (my express views)...
Paradigmers, our share price is $2.60 AUD.
I don't know about you, but this is ONE stock I will have when it hits $30...when it touches $50..when it breaches $100 and beyond. Maybe I won't have my full allocation I have now...but I will have a good chunk that I will
never sell....ever. I'm upgrading my fridge in the garage to hold more.
This is the AMZN I am NOT missing.Ahh here comes the cry baby voice again "But Mozz, we will never be as big as Amazon...." Maybe true...but according to my forecasts, we are going to get quite Titan like...one day....when people are in pain, and there are many (upwards of 100 million in U.S. alone)...they will do a lot to relieve it and specially in a safe manner. Of course not all 100 million will use iPPS...but a good 10%? Why not...Humira hit 65% penetration at max....they are black labelled...I fully see a day when our penetrations hit 50% plus. Then you tell me what our shares are worth and how much they are trading for and how some 225 million shares is simply not enough! In my views demand will far outstrip supply....
So as the Co Founder of Motley Fool said, great performing stocks with great sales tend to trend further that way...This so applies to us...HOW Mozz, we don't have a single drop of sales yet?!
Wrong...wrong and more wrong...we have plenty of sales....What is ol' Mozz talking about...surely Mozz has lost it now....
We actually DO have sales......HUH? Yes we have SOLD our product to more than 900 SAS patients so far...we sold our product to the FDA who approved the EAP for the ten American ex pro footballers....they bought into our product and what were the results? Were the results not better than Placebo? Did Placebo not go in the OPPOSITE direction (BML, volume, size, grade for example)....Does Opioids give only 20-30% pain reduction at best..what do we give on average? MORE...and we are safe.IS THIS NOT OUT PERFORMANCE?
This is massive out-performance compared to the current std of care. Apart from YOU and I...not many still know about us. We are first in line...yes we have some time to wait still...but imagine for a second how many people will be CRAVING for our shares in the not too distant future...will we not feel like KINGS and QUEENS after a few years when the rest of the investing world catches up? Up ramper who me? I doubt it..I reckon I'm being conservative compared to the action of iPPS over the longer term.
I have been in long queues before and have reaped rewards...you and I are both closer to the front as we are heavily
armed with the knowledge of what we own. Stay in queue with me, do not leave your place.SO HOW DOES HE (Tim Beyers) DO IT? Well he was speaking at the time in context of the MASSIVE CLOUD disruption that is going on as we speak...He simply said that he talks to a lot of developers and one of the great signals is, when one of these developers says something like " ... I figured out something else to do with this thing"...that's the clue. It means that there is versatility in the product. It's a potential solution yes, but it has a broadened scope. PARADIGMERS, again this is OUR CLUE.
We have a drug that does NOT just ATTEND and ADDRESS
one indication...there are potentially many. I keep coming back to my friend,
@Ave Maria ....he tells me time and time again...Mozz, please do not forget there are more than
2000 Inflammatory conditions. Par-folk, though it is a BIG one for sure, OA is just one of them. Mozz, what does that mean exactly? Paradigmers...I give you the beautiful situation that we find ourselves in of not one product...not one application...but multi revenue streams....Yes a given company may have a good revenue stream....but look at the future as the stock market always looks at the future and future growth....what other revenue streams can be utilised and are up and coming?
Time for an external example?PNV...a beautiful Aussie company, they have a lovely product and are kicking goals....it's fairly early in their story but they are commercial and growing rapidly....but the potential for more is there on the horizon...how? By the next product...a Hernia solution, and after that? Breast reconstruction....mate....
I don't often post on other threads but here was an example ---->
PNV
Magnificent opportunities right under our noses, have been following this one for a while...Now let's re-look at PAR...
Yes we have the big one...OA...yes it is still a ways off...but look at all the other indications we are actually pursuing NOW...and what of the future? Want a reminder?
- MPS 1 and 6 but soon more strains
- Hay Fever
- CHIKV
- RRV
- ARDS
- Heart Failure
As if the last few paragraphs are not enough...now at the R&D Day we learn that Paradigm have some 3 separate drugs they are potentially looking at further developing. As I have said I don't think any of them could hold a candle to iPPS but anything is possible. The point is that we are further diversifying, we are further de-risking...we have such a crazy potential amount of growth ahead of us with just the one drug let alone pursuing this 'repurposing' strategy which is what the company is aligning to for the ultra long term.
OK so how do some of the Motley Fool guys do it, what do they look for? I have adapted their mantra a little and I have also added a few points and not included some for relevance. My comments in
green.
1) Invest in what is different -Is the customer talking differently about the product
YES we have a number of early adopters/customers and YES they are taking "differently" about our product! Revolutionary is a word I would use.2) Look at qualitative research
Greater than 50% achieving better than 50% reduction in pain when the std of care may result in up to 30% but with massive side effects and in some instances actually lead to addition AND further destruction of cartilage?3) Is the company themselves a "Customer Zero"? Did the founder come up with this solution to solve their own problem?
He sure did, he tried it on himself...he was told he would need surgery with a year or two...he hasn't had knee surgery for some 9 years already and may never need it now! HOW? iPPS4) Start with the product, is it different?
"Different" is a Mozz Understatement. There is nothing like the multiple mode of actions for OA and NGF related pain out there.5) Does it stand apart from competitor's solutions?
In a simple word, yes, and how! 6) What are the initial signs, are customers using the product, what is their feedback so far?
You want customer's feedback? I will highlight this within a separate post to come before the year is done...7) Who's is the ideal customer?How big is the TAM? What is the DCF like?How will the company address the customer base?
TAM? 10% of the world's population...but that's too much to consider...let's use just 1% of that, it's still 60 million potentially....yes that's just for OA.DCF? I'll leave it to@cevicheand other experts...8) Can you talk to one or more of the customers?
Yep...just post here at HC - PAR, they will respond. 9) What is the optionality of the company? "I like the product being used for this....what else can it be used for?"
Amazing scope for us here - askAveMaria10) Runway? Is this addressing a massive and growing problem?
OA is a growing problem, what's the CAGR, 8.1% 7 for OA.11) Are habits changing? Taxi and Uber example....
Opioids reliance, creating a vacuum, a massive opportunity for us as governments around the world attempt to restrict the usage of opioids.12) Financial evidence of sustainable growth potential, but not as important initially, the points before this have to stack up first.
This will come in time.Finally you need to stay the course, like we saw in parts 1 and 2....take a look at the following info...we will come up against rough seas on our journey for sure....stick with the plan.
Again from the Fools:
"The ability to manage our temperament, to hold our companies for the very long term, and to do great research are competitive advantages we have over most of the investing world". Another question we must ask...not just today but every now and again:HOW VALUABLE DO YOU THINK THIS BUSINESS WILL BE GOING FORWARD?
MOTIVATE MEI'm no Gym junkie...I don't really love exercise all that much though the endorphins kick in when I go for a jog or do some sport and I do know the importance of exercise. BUT a good mate has introduced me to a very simple motivational tool and while it is early days, I'm loving it...and it is egging me on. Paradigmers, it is in this same way that we sometimes need to be motivated to buy and/or hold PAR. A lot like exercise can be boring for me, investing can be a bit boring for a lot of others. This is one area I need no motivation..it is inherent..it's in the blood for me. If you have made it to this here paragraph, a sincere congrats, I'm not kidding. It takes discipline to read through other's words. In a total summary of all my words in these three parts....keep at least some slice of shares of PAR for the long term, I don't think you will regret it.
Yeah, nah.
DISCLAIMERSLots of info for you to digest here...remember, none of it is to be construed as advice no matter how similar to advice it might sound. Always do your own research, get comfortable in what you are placing your hard earned moola into PAR and remember the laws of diversification, not one of us knows what is exactly around the corner though the facts stack up, the evidence is clear and the story looks pretty darned good.
PAR - 100 bagger potential in the future? Not entirely impossible.
REFERENCES1] Christopher Mayer,
100 Baggers (Baltimore, 2015)
2]
https://cglife.com/blog/how-to-put-science-under-scrutiny-a-guide-to-critically-evaluating-information/3] https://www.outlookindia.com/outlookmoney/magazine/story/have-the-vision-courage-and-patience-451#:~:text=In%20his%20classic%20book%2C,the%20rarest%20of%20the%20three.%E2%80%9D&text=This%20is%20the%20first%20and,step%20of%20long%2Dterm%20investing.
4] Tony Robbins,
Money Master The Game (London, 2014)
5] Motley Fool (USA)
6] Dean Graziosi,
Millionaire Success Habits (Carlsbad, 2019)
7] https://www.globenewswire.com/news-release/2019/01/28/1705844/0/en/Osteoarthritis-Drug-Market-Will-Grow-to-USD-10-327-Million-By-2025-Globally-Zion-Market-Research.html#:~:text=According%20to%20the%20report%2C%20the,8.1%25%20between%202019%20and%202025.
(20min delay)