How To 10x Your Money

Peter Lynch first coined the term 10-bagger in his 1989 book One Up on Wall Street, and since then the phrase has become synonymous with any investment that returns a high multiple on its initial stake.

The art of investing is concerned with making money, and it comes as no surprise that the goal of catching at least one multi-bagger in your trading career is a highly prized achievement.

In this article we’ll look at some important strategies you can employ to potentially reap these gains, and examine some real-world case studies of companies that have returned high profits in a relatively short amount of time.

How Can I Multiply My Money?

Companies that possess the potential to make tenfold gains are usually largely undervalued at some point in their life-cycle – but there are other telltale signs of a high-yielding company too. Luckily, we can identify some of the common traits that many of these firms share.

First, these companies are highly innovative – disruptive, even. They are future leaders in their field; it’s just that few recognize this at the time, hence the investment opportunity they present.

Second, there are some sectors that produce more multi-bagger companies than others. These are usually industries that are associated with high rates of growth i.e. Biotech firms, Cloud applications, Software-as-a-Service and the Fintech space. 

Finally, high-profit investments often enjoy early high cash-flows into the business. With the exception of development-stage drug companies, 10-bagger stocks are usually awash with cash, even if they aren’t able to turn a profit with the money straight away.

The cutting-edge nature of these enterprises attracts a lot of interest, and, with it, paying customers. Indeed, Amazon (AMZN) famously took 14 years before it was able to turn a profit.

Two Of The Best Top Growth Stocks

Ocugen

On paper, Ocugen is a biotech firm developing gene therapies to combat blindness and its related diseases. However, the company redirected its focus and expertise during the coronavirus pandemic, successfully producing a vaccine for COVID-19, and landing the rights to license the drug, Covaxin, to the lucrative U.S. market.

Its vaccine also turned out to be potentially useful against several mutant variants of COVID-19 that made headlines around the world lately. 

The stock is already up 60-times from its price last December – but at its current valuation of just $2 billion, Ocugen represents the kind of moon shot that many multi-baggers are made of.

Takung Art

Another example of a high-performing stock is Takung Art, a Hong Kong-based online platform that specializes in selling artwork such as paintings, ceramics and sculpture.

The company has seen its share price explode the last year, reaching highs of $74 in March 2021 from lows of just 77 cents in 2020.

It appears, however, that the firm has little fundamental worth, having posted fairly poor revenue and sales numbers for many years now. However, the recent high-profile interest in NFTs – non-fungible tokens – has sent its valuation skywards, with investors reckoning that the business will benefit from the blockchain technology at some point in the future.

The only problem with this is that Takung Art doesn’t yet use NFTs in its sales process, nor has it given any indication that it will do going forward. And despite its previously enviable growth performance, a bet on this already overvalued stock right now would be a swing in the dark – and one that would likely have little chance of paying off. 

How Can I Grow My Money Instantly?

Investing is ultimately geared toward making a profit. And yet, this can sometimes be achieved more consistently with less risky methods than a punt on a highly suspect growth stock you hadn’t heard about until last week.

The slow and steady path to riches is far more well-trodden and fraught with less risk. This doesn’t mean you can’t still keep an eye open for the next Ocugen – you should – but a strategy of compounded gains over the long-term, such as with dividend investing, for instance, can get you to the same place albeit taking a little while longer.

Extremely volatile investment vehicles might appeal to you as a purely speculative play on what are some of the most risky asset classes: cryptocurrencies could be considered one of these – with wild daily price swings of 30% or more seeming attractive to the fast-living day trader.

But if you take this route prepare for larger losses too. Dogecoin has been in the news lately, with its backing by Elon Musk seeing its price multiply over 300 times since just a couple of months ago. But what goes up also comes down, and it’s vital to know when to enter – and, more importantly, exit – these markets to ensure you make a profitable trade.

Speculate Only With Money You Can Afford To Lose

For the tried and trusted way to make money in the stock market, it’s hard to argue against investing in the blue-chip companies. These days, these are pretty much covered by the FAANG portfolio and many of the top indexes, such the Dow Jones Industrial Average and the S&P500. 

Following your favorite investing personality is also another way to go: Warren Buffett’s Berkshire Hathaway (BRK.B) fund will expose you to the best the market has to offer; and Cathie Wood’s various ARK ETF’s will do the same – while still offering some surprises from her own idiosyncratic choices of up-and-coming enterprises.

Or perhaps you could just hedge it: purchase a few random alt-coins on Binance or Coinbase, take a stake in the Nasdaq, and buy a put option on anything Elon Musk is hyping this month. You could certainly do worse.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.