Ten bagger stock

Ten bagger stock

Ten bagger is an investment term coined by Peter Lynch in his book, "One Up On Wall Street." This refers to an investment which is worth ten times its original purchase price, and was adapted from baseball where "bag" is a casual term for "base", and extra-base hits like doubles, triples, and home runs are colloquially called two-, three-, or four-baggers.

Another line from the internet described a ten bagger stock as A stock whose price multiplies 10 times over, leaving the shareholder euphoric, giddy, and ... rich.

So we all invest in Bursa Malaysia hoping that one of our investment will turn into that elusive Ten bagger stock one day. Imagine that our one thousand investment becomes ten thousand or a ten thousand investment becomes one hundred thousand in value. Sounds great.

Fortunately in Bursa Malaysia, ten bagger stocks are there to be "discovered" from time to time if one is sharp or lucky enough to be one the early investors. Take the recent case of one stock Datasonic Group Berhad. Its share price shot up from below RM1 to RM10 (before bonus issues) in a space of less than two years (I believed I am right about this) and another one, DKSH Holdings Berhad. Investors who bought the stock at 39 sen on April 20, 2009 and holding until today must have been more than happy than anyone else. DKSH touched a high of RM9.20 on March 31, 2004. If you included the dividends all those years, definitely there must be several hundreds of dividends including those special dividends.

Unfortunately, many investors especially the retailers do not possess that ability to hold on to their massive winning stocks. They are easily distracted by the daily movements that caused the share price to move up and down. I personally know of one of my readers (I discussed with him about Harrisons before that blog was posted) and he told me years ago, he bought some DKSH shares at RM1.80 and sold off for just RM2.20! He was obviously affected and influenced by certain factors internally and externally at that time. When he looks at the present share price of DKSH, he was really mad with himself. (I think he scolded himself silently deep inside his heart, ha ha ...)

Anyway, despite my more than 20 years experience of investing in Bursa Malaysia, I must truly claim that I have yet to have invested in one stock that turns out to be a ten bagger stock for me! Yes, you hear me right, Kassim is still not able to claim he has that ten bagger stock. Perhaps the nearest stock I can claim to have is that strong potential company called Keck Seng Berhad. Even based on today's closing price of RM6.99 at time of posting on May 2, 2014, my remaining 1,500 shares of Keck Seng (bought at RM1.65 on Nov 2, 1999) investment will only be RM10,485.00. Together with all the dividends received, it still did not add up OFFICIALLY as a ten bagger stock.

But don't despair if you are like me. There is nothing wrong if we are not able to have one ten bagger stock. It is easier to aim for two or three bagger stocks. All one needs to do is to have that ability (or luck, depending on how you see it) to be able to invest in stocks that generated consistent profits and then hold on over a mid to long term period (3 years or more). Sometimes, that stock we hold slowly turns up to be potential diamonds and its share price will start to move up north over that period. Be brave enough to hold on as long as the business fundamental of the company remains.

Imagine when you have a few stocks of that kind in your portfolios achieving that kinds of returns and you will be amazed of your huge returns when all those profits are added up together.

Take my two recent profit takings of Hup Seng and Pharmaniaga shares. Although both were not ten bagger stocks, but the amount of profits are something I believed many investors would be more than happy to have that. That is why I believed that we should not be bothered by huge returns from investing in Bursa Malaysia. I believed we should just focus on understanding the simple business of the our stocks and think ourselves as business partners. In this way, we won't be so much bothered by the daily fluctuations of the share price (due to daily changing various factors which will have an impact).

We feel great when dividends are credited into our bank, especially dividends regular dividends that are on par or even slightly above the bank's fixed interest rate.

We should see ourselves as BUSINESS OWNERS of various companies in Bursa Malaysia.

LPI Capital Berhad

- a how many bagger stock?

Recently I received my LPI's Annual Report 2013. As I read through the pages, I came across this part which I would like to share with readers about the returns of LPI if one had invested :

Over the medium-term period of 5 years

A shareholder of LPI who purchased 1,000 LPI shares at a price of RM9.45 per share at the beginning of 2009 or an investment of RM9,450 and held them for 5 years to the end of 2013 would have received gross dividends amounting to RM6,463 and would have held 1,600 LPI shares as at the end of 2013. At the price of RM17.44 per ordinary share at the end of 2013, the shareholder would have shares worth RM27,904 which together with the gross dividends of RM6,463 and would give the shareholder an exceptionally high annual rate of return on investment of 32.4% or a total return of 238.6% for the 5-year period.

If a shareholder of LPI had bought 1,000 shares

in LPI when it was listed in 1993,

and assuming the shareholder had subscribed for every right issue to date and had not sold any of the shares, she/ he would have, at the end of 2013, 8,640 LPI shares worth RM150,682, based on the share price of LPI shares of RM17.44 as at the end of 2013. In addition, she/ he would have also received a total gross dividend of RM57,894 over the years which LPI has unfailingly paid every year since its listing in 1993.

With a capital outlay of RM10,730, including subscription for all rights issues, the total return to this shareholder would be RM197,846 or a remarkable average rate of return of 26.1% annually for each of the 20 years that this shareholder has held the shares in LPI since it was listed in 1993 or a total return of 1,843.9% for the period.

So how many bagger stock is LPI?

A simple idea to use less plastic

- Have you start the practice?

Remember how I shared from my previous blogs about how to use less plastic when we go shopping in the hypermarket posted on Apr 4? I do not  know really at all if any reader has adopt my idea at all, but here is what I am going to share of my experience with several hypermarkets in Penang.

The response from the hypermarket's assistants has been a tremendous! They gave me the thumbs up! They actually supported me using the recycled white plastic sheets again and again! Not only that, my home has less white plastic sheets to keep too! Definitely a WIN-WIN-WIN situation for me, the hypermarkets and most important of all, the environment.

If there is anyone who is also practicing my ideas or perhaps has some different ideas of how to use less plastic, please share or email me at kassim123888@gmail.com

Nothing makes my day more happy knowing that someone is also supporting the environment by using less plastics!