Follow The Multibaggers

 

Today we learn about how to find multibaggers stock? Let’s begin

The best place to begin looking for the multibaggers is close to home-if not in the backyard then down at the shopping mall, and especially wherever you happen to work. Most of the multibaggers already mentioned- Dunkin Donuts, The Limited, Subaru, Dreyfus, McDonald’s, Tambrands and Pep Boys-the first sips of success were apparent at hundreds of location across the country. The fireman in New England, the customers in central Ohio where Kentucky Fried Chicken (KFC) first opened up, the mob down at Pic ‘N’ save, all had a chance to say, “This is great; I wonder about the stock, “long before Wall Street got its original clue.

 

The Tenbagger In Ulcer

Can’t think of any such opportunity in your own life? What if you are retired, live ten miles from the nearest traffic light, grow your own food, and don’t have television set? Well, maybe one day you have to a doctor. The rural existence has given you ulcers, which is the perfect introduction to SmithKline Beckman.

Hundreds of doctors, thousands of patients, and millions of friends and relatives of patients heard about the wonder drugs Tagamet, which came on market in 1976. So did the pharmacist who dispensed the pills and the delivery boy who spent half his workday delivering them.

 Tagamet was boon for the afflicted, and a bonanza for investors. A great patients’ drugs is one of that cures an affliction once and for all, but a great investor’s drug is one that the patient has to keep buying.


Tagamet was one of latter. It provided fantastic relief from the suffering from ulcers, and the direct beneficiaries had to keep talking it again and again, making indirect beneficiaries out of the shareholders of SmithKline Beckman, the maker go Tagamet. Thanks largely to Tagamet, the stock rose from $7 a share in 1977 to $72 a share at the 1987 high.

In general, if you polled all doctors, I bet only few percentage would turn out to be invested in medical stocks,


and more would be invested in oil; and if you polled shoe store owner, more would be invested in aerospace than shoe stocks.


Why it is that stock certificate, like grasses, are always greener in somebody else’s pasture I am not sure.


Therefore the doctor who understands the ethical drugs business inside out is more comfortable investing in Schlumberger, an oil- service company about which he knows nothing; while the managers of Schlumberger are likely to own Johnson & Johnson or American Home Products.

But the important point is that

1. The oil expert, on average, are in better position that doctors to decide when to buy or to sell Schlumberger;

2. The doctors, on average, know better that oil expert when to invest in successful drug.

The person with the edge is always in a position to outgases the person without an edge-who after all will be the last learn of important changes in given industry.

The professional’s edge is especially helpful in knowing when and when not to buy shares in companies that have been around awhile, especially those in so-called cyclical industries. If you work in the chemical industry, then you will be among the first to realize that demand for polyvinyl chloride is going up, price are going up and excess inventories are going down. You will be in a position to know that no new competitors have entered the market and no new plants are under construction, and that it takes two to three years to build one. All this means higher profits for existing companies that make the product.

Mr. Lynch Says, “I missed the whole deals and didn’t realize it until it was too late. I guess I was too busy thinking about Union Oil of California just like the doctors.”



 

Invest in things you know about.

 

Congratulation you take one more step towards your financial freedom.

This summary from Book-“One Up On Wall Street”

 

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