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Today’s gem is this chart showing the level of return and length of time required to achieve a 100 bagger ($10,000 –> $1,000,000).
This chart serves as a great reminder that, in investing, time is just as important as annual returns.
One of my favourite examples of a 100-bagger is Constellation Software, arguably the greatest software investor of all time. They went public in 2006 and achieved 100-bagger status 15 years later (almost to the day). This translates to ~36% annual returns for shareholders. Great companies tend to stay great but still require an adequate amount of time in order to deliver extraordinary returns.
What a company can achieve in a single year matters far less than what it can (consistently) achieve over a long period of time. It sounds logical and easy on paper, but this fact gets lost in the day-to-day market activities and quarterly earnings reporting cycles.