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100 to 1 in the Stock Market: A Distinguished Security Analyst Tells How to Make More of Your Investment Opportunities
In 100 to 1 in the Stock Market, Thomas Phelps discloses the secrets and strategies to increasing your wealth one hundredfold through buy-and-hold investing. Unlike the short-term trading trends that are popular today, Phelps's highly logical, yet radical approach focuses on identifying compounding machines in public markets, buying their stocks, and holding these investments long term for at least ten years. In this indispensable guide, Phelps analyzes what made the big companies of his day so profitable for the diligent, long-term investor. You will learn how to identify and invest in profitable business models without visible growth ceilings that will quickly increase your earnings. Worth its weight in gold (and then some), 100 to 1 in the Stock Market illuminates the way to the path of long-term wealth for you and your heirs. With this classic, yet highly relevant approach, you will pick companies wisely and watch your investments soar! Thomas William Phelps (1902-1992) spent over 40 years in the investing world working as a private investor, columnist, analyst, and financial advisor. His illustrious investing career began just before the stock market crash in 1929 and lasted into the 1970s. In 1927, he began his career with The Wall Street Journal where he was a reporter, news editor, and chief. Beginning in 1936, he edited Barron's National Financial Weekly. From 1949 to 1960, he served as an assistant to the chairman and manager of the economics department at Socony Mobil Oil. Following this venture, he was a partner in the investment firm of Scudder, Stevens & Clark until his retirement in 1970. "One of the five greatest investment books you've never heard of" — The Daily Reckoning "Of all the books on investing that I've read over the years, 100 to 1 in the stock market one was at once, the most pleasurable and most challenging to my own beliefs." — Value Walk (ValueWalk.com) "For years we handed out copies of Mr. Phelps book as bonuses." — Timothy Lutts, Cabot Investing Advice, one of the largest investment advisories and newsletters in the country since 1970
288 pages, Paperback
First published January 1, 1972
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February 16, 2022Mohnish Pabrai recommended this book. There's also a similar themed book by Christopher W. Mayer '100 Baggers: Stocks That Return 100-To-1 and How to Find Them'.
How does this compare to Chris Mayer's book?
Buy right and hold on: The key is not only finding them, but keeping them.
Invest in long term enterprises which have the potential to vastly outpace other companies and industries and stick with them as long as the theme is intact. Forget about the trading and use the time you would have spent monitoring the trade with your family.
To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.”
Patience is critical: "Inactivity bordering on sloth is the cornerstone of our investment approach." -Warren Buffett
100-bagger is the product of time and growth. To net a 100-bagger, you need to hang onto a quality stock for a number of years (10-30 yrs). Phelps also recommends a holding period of >10yrs
Buy right and sit tight: If the job has been correctly done when a common stock is purchased, the time to sell it is—almost never.
The story of Ronald Read (janitor at JC Penny who left behind a $8m estate) shows you the power of simple investing concepts: keeping fees low, investing in quality companies, reinvesting dividends and—most importantly for our purposes—the power of just holding on.
https://www.cnbc.com/2016/08/29/janit...
3 factors determines terminal wealth = fn(initial capital, compounding rate, length of runway)
“Does it deserve my capital?” - Li Lu
Great concept, great economics, great product
Vitamin vs antidote? What's the pain point? How large is the prize?
“Every human problem is an investment opportunity if you can anticipate the solution,”
It takes vision and imagination and a forward-looking view into what a business can achieve and how big it can get.
You need to have a long runway to grow.
Understanding how a company could create value in the years ahead. If you can’t see how or where a company adds value for customers in its business model, then you can be pretty sure that it won’t be a 100-bagger (or it is not within your circle of competence).
Great companies that will continue to be great. Wide moats.
Re: ‘Measuring the Moat’ Mike Mauboussin 2002
A truly great business must have an enduring “moat” that protects excellent returns on invested capital.
* Without shelf space for your products you are just a couple of people with ideas
* If you have a brand that catches on, grows, and hits scale, the costs start to slowly unwind
* It costs a lot to switch
* Network effects
* What matters is the amount of the market you need to capture to make it hard for others to compete
* Stable industries are more conducive to sustainable value creation
* Gross profit margins are surprisingly resilient and do not contribute meaningfully to fade rates
Growth, growth and more growth are what power these big movers
GROWTH in all its dimensions—sales, margin and valuation
Great stocks often offer extensive periods during which to buy them.
Earnings just seem to step higher and higher, like going up a staircase. All of these studies show us that past multi-baggers enjoyed strong growth for a long time.
There is no way around it. Almost all of the businesses in the 100-bagger study were substantially bigger businesses at the end than when they began.
Focus on growth in sales and earnings per share.
Find a business that has lots of room to expand—it’s what drives those reinvestment opportunities.
CAN SLIM by William O’Neil:
Current quarterly earnings momentum (accelerating earnings growth)
Annual earnings growth (growing earnings)
New products/services; Supply & demand;
Leader vs laggard;
Institutional sponsorship;
Market direction
https://en.wikipedia.org/wiki/CAN_SLIM
New methods, new materials and new products—things that improve life, that solve problems and allow us to do things better, faster and cheaper. There is also an admirable ethical streak - investing in companies that do something good for mankind.
Simple yardstick for company with favorable long-term prospects:
1 EPS growth accelerating
2 ROIC improving
Rapid increase in sales, rising profits and a rising ROE
GARP: Growth at the Right Price
S—Size is small
Q—Quality is high for both business and management
G—Growth in earnings is high
L—Longevity in both Q and G
P—Price is favorable for good returns
A company can report a fall in earnings, but its longer-term earnings power could be unaffected.
Be fearful when others are greedy and greedy when others are fearful
You can’t just willy-nilly buy pricey growth stocks and expect to come up with 100-baggers.
When you get lots of growth and a low multiple you get the twin engine of 100-baggers. That’s where you really get some great lift, with both factors working in your favor.
"It's far better to buy a wonderful business at fair price than a fair business at a wonderful price." -Warren Buffett
You ought to prefer to pay a healthy price for a fast-growing, high-return business (such as Monster) than a cheap price for a mediocre
Good stocks are seldom without friends. Hence, they are rarely cheap in the usual sense. Don’t let a seemingly high initial multiple scare you away from a great stock.
Don't just go for cheap stocks. Go for stocks that appear expensive but are in fact undervalued if properly analyzed.
I like ideas where the story is not obvious from the numbers alone. I want to find that something else is going on in the business that makes it attractive.
The best ideas are often the simplest. Wonderful businesses with pricing power.
e.g. AMZN/BABA: online shopping is a tidal wave
e.g. GOOG = the new Altria
“Never invest in any idea you can’t illustrate with a crayon.” -Peter Lynch
Combination of rising earnings and a higher multiple: the truly big return comes when you have both earnings growth and a rising multiple. Ideally, you’d have both working for you.
A low entry price relative to the company’s long-term profit potential is critical.
Why Warren Buffett bought APPL - growth stock w/ room for multiple expansion
“Never if you can help it take an investment action for a non-investment reason.”
Studying 100-baggers, then, comes down to studying growth
Autozone 100x: Ho-hum growth rates of 2–5 percent. Yet AutoZone bought back huge sums of stock, which powered earnings-per-share growth of 25 percent a year.
But be leery of buybacks and no sales growth. If you have a company with tons of cash flow but top-line [sales] growth is 5% or less, the stock doesn’t go anywhere. IBM is a good example. Good ROE. Cheap. But the absence of top-line growth means the decline in share count has been offset by multiple contraction. As a result, the stock goes nowhere.
Management
“In the ultimate analysis, it is the management alone which is the 100x alchemist.”
Top-management teams that made good capital decisions about how to invest company resources. There was often a large shareholder or an entrepreneurial founder involved.
Constant desire to grow a business is a key characteristic
Honest, rational, competent and avoids institutional imperative
Decentralized organizations release entrepreneurial energies
LBO model: focus on cash flow. Use leverage to acquire more properties. Improve operations. Pay down debt. And repeat.
When done right, buybacks can accelerate the compounding of returns.
When you find a company that drives its shares outstanding lower over time and seems to have a knack for buying at good prices, you should take a deeper look. You may have found a candidate for a 100-bagger.
When markets are high, there is no question that’s when the shysters like to come out and pick the pockets of complacent investors.
But when a man suspects any wrong, it sometimes happens that if he be already involved in the matter, he insensibly strives to cover up his suspicions even from himself.
“Whose bread I eat, his song I sing.” or “Don’t ask your barber if you need a haircut”
- [ ] Charlie Munger’s checklist against Psychology of Misjudgement
- [ ] First, do your work, and only then, talk with management
- [ ] Reading conference-call transcripts is better than listening to them
- [ ] Are questions ever evaded? Which ones?
- [ ] it’s the calls that go like this: “Great quarter, guys.” “Thanks, Mike.” If the transcript is filled with that and there are no pointed questions, then it “smells like a stage-managed call.
- [ ] Read several quarters at a time to look for disappearing initiatives, changes in language.
- [ ] Messy, indecipherable disclosures are clues to stay away. Obfuscation in accounting footnotes is a Red Flag.
ROIC
"Invert; always invert" -Charlie Munger
Finding what will become a 100-bagger is as much about knowing what not to buy as it is about knowing what to buy. The universe of what won’t work is large. Knocking out huge chunks of that universe will help make your search for 100-baggers easier.
“In Africa, where there are no antelope, there are no lions.”
“When looking for the biggest game, be not tempted to shoot at anything small.”
Don’t bother playing the game for eighths and quarters.
Don’t waste limited mental bandwidth on stocks that might pay a good yield or that might rise 30 percent or 50 percent.
You only have so much time and so many resources to devote to stock research. Focus your efforts on the big game: The elephants. The 100-baggers.
Over the long term, it’s hard for a stock to earn a much better return than the business which underlies it earns.
We’re looking for companies with very high returns on capital. That’s one of the key requirements 100-baggers must meet.
Monster shows us the power of high sales growth and building a brand and the potent mix of high sales growth and rising profit margins and rising return on equity.
Return on capital is extremely important. If a company can continue to reinvest at high rates of return, the stock (and earnings) compound . . . getting you that parabolic effect.”
What are the reinvestment dynamics of this business ?
Businesses that can reinvest their free cash flow in a manner that continues to earn above-average returns. You need a business with a high return on capital with the ability to reinvest and earn that high return on capital for years and years.
See something beyond the reported earnings e.g. AMZN: the power of sales growth and the ability to see something beyond the reported earnings.
How does the company finance its growth?
When a company can build book value per share over time at a high clip, that means it has the power to invest at high rates of return.
The rich have access to networks—through social and business connections—that give them better information. It helps them keep their edge over less connected peers.
Macro
Economists are probably the one group who make astrologers look like professionals when it comes to telling the future.
“Extraordinary performance comes only from correct non-consensus forecasts,”
We will continue to ignore political and economic forecasts which are an expensive distraction for many investors and businessmen.
The idea of wholesale shifts [in and out of the market at different stages of the business cycle] is for various reasons impracticable and undesirable.
Slumps are experiences to be lived through and survived with as much equanimity and patience as possible.
Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. . . . But, surprise—none of these blockbuster events made the slightest dent in Ben Graham’s investment principles.
Lower prices, as found in such disasters, create “easier” opportunities to make hundredfold returns.
In 2008, when the stock market tanked, many people I know were afraid to invest.
Risk of losing one's job makes it difficult to commit additional risk capital during economic depression
“General markets tend to come back strongly in periods subsequent to price crashes! That was the case in 1932, 1937, 1962, 1974–75, 1980–82, 1987 and 2001–2002. A comeback also seems likely after the unprecedented crash of 2007–2008.”
The ultimate permanent impairment is when a firm goes out of business.
The best inflation fighters are 100-baggers.
The ideal business during an inflationary time is one that can (a) raise prices easily and (b) doesn’t require investment in a lot of assets.
These intellectual businesses are wonderful investments in both inflationary and disinflationary environment
Asset-heavy businesses generally earn low rates of return rates that often barely provide enough capital to fund the inflationary needs of the existing business, with nothing left over for real growth, for distribution to owners, or for acquisition of new businesses.
Destroy your best loved ideas
Looked forward to having his own ideas tested and knocked down:
I have no attachment to ideas. I have no problem changing my mind. In fact, I look forward to doing so and actively try to poke holes in my own ideas and theories. Be suspicious of abstractions.
Hunting for 100-baggers is completely independent of whatever is happening in the market. You should never stop looking for 100-baggers, bear market or bull.
Few bets, infrequent bets & big bets
Limiting his activities to buying only when he found intrinsic values far above stock prices.
Don’t be afraid to hold onto cash until you find those special 100-bagger opportunities. It’s good to have cash and not be afraid to buy when things look bad.
What is the "right" level of cash? Trade off b/w cash drag on returns vs cash optionality & not trading off a good night's sleep
Kelly's Formula/Kelly's Criterion = Expected net winnings / Net winnings if you win = edge/odds = W - [(1-W)/R] where W: winning probability; R: win/loss ratio
Better to own fewer stocks and more of your very best ideas than spread yourself too thin.
“Sorry to have gone too large on Elder Dempster. I was suffering from my chronic delusion that
one good share is safer than 10 bad ones.” -Lord Keynes
He rejected the idea, as Buffett and other great investors have, that you should dilute your best bets by holding a long list of stocks.
Tobin's Q/Sam Zell’s replacement cost
More zeal for consolidating businesses than for expanding them or initiating them. With stock prices low, the cash-rich investors in corporate America had a chance to steal some things. Why invest in new oil wells when you can buy them on the stock market for less than half of what it would cost you to drill new ones? Why build new factories when you can buy a competitor for 20 cents on the dollar?
How does this compare to Chris Mayer's book?
Buy right and hold on: The key is not only finding them, but keeping them.
Invest in long term enterprises which have the potential to vastly outpace other companies and industries and stick with them as long as the theme is intact. Forget about the trading and use the time you would have spent monitoring the trade with your family.
To make money in stocks you must have “the vision to see them, the courage to buy them and the patience to hold them.”
Patience is critical: "Inactivity bordering on sloth is the cornerstone of our investment approach." -Warren Buffett
100-bagger is the product of time and growth. To net a 100-bagger, you need to hang onto a quality stock for a number of years (10-30 yrs). Phelps also recommends a holding period of >10yrs
Buy right and sit tight: If the job has been correctly done when a common stock is purchased, the time to sell it is—almost never.
The story of Ronald Read (janitor at JC Penny who left behind a $8m estate) shows you the power of simple investing concepts: keeping fees low, investing in quality companies, reinvesting dividends and—most importantly for our purposes—the power of just holding on.
https://www.cnbc.com/2016/08/29/janit...
3 factors determines terminal wealth = fn(initial capital, compounding rate, length of runway)
“Does it deserve my capital?” - Li Lu
Great concept, great economics, great product
Vitamin vs antidote? What's the pain point? How large is the prize?
“Every human problem is an investment opportunity if you can anticipate the solution,”
It takes vision and imagination and a forward-looking view into what a business can achieve and how big it can get.
You need to have a long runway to grow.
Understanding how a company could create value in the years ahead. If you can’t see how or where a company adds value for customers in its business model, then you can be pretty sure that it won’t be a 100-bagger (or it is not within your circle of competence).
Great companies that will continue to be great. Wide moats.
Re: ‘Measuring the Moat’ Mike Mauboussin 2002
A truly great business must have an enduring “moat” that protects excellent returns on invested capital.
* Without shelf space for your products you are just a couple of people with ideas
* If you have a brand that catches on, grows, and hits scale, the costs start to slowly unwind
* It costs a lot to switch
* Network effects
* What matters is the amount of the market you need to capture to make it hard for others to compete
* Stable industries are more conducive to sustainable value creation
* Gross profit margins are surprisingly resilient and do not contribute meaningfully to fade rates
Growth, growth and more growth are what power these big movers
GROWTH in all its dimensions—sales, margin and valuation
Great stocks often offer extensive periods during which to buy them.
Earnings just seem to step higher and higher, like going up a staircase. All of these studies show us that past multi-baggers enjoyed strong growth for a long time.
There is no way around it. Almost all of the businesses in the 100-bagger study were substantially bigger businesses at the end than when they began.
Focus on growth in sales and earnings per share.
Find a business that has lots of room to expand—it’s what drives those reinvestment opportunities.
CAN SLIM by William O’Neil:
Current quarterly earnings momentum (accelerating earnings growth)
Annual earnings growth (growing earnings)
New products/services; Supply & demand;
Leader vs laggard;
Institutional sponsorship;
Market direction
https://en.wikipedia.org/wiki/CAN_SLIM
New methods, new materials and new products—things that improve life, that solve problems and allow us to do things better, faster and cheaper. There is also an admirable ethical streak - investing in companies that do something good for mankind.
Simple yardstick for company with favorable long-term prospects:
1 EPS growth accelerating
2 ROIC improving
Rapid increase in sales, rising profits and a rising ROE
GARP: Growth at the Right Price
S—Size is small
Q—Quality is high for both business and management
G—Growth in earnings is high
L—Longevity in both Q and G
P—Price is favorable for good returns
A company can report a fall in earnings, but its longer-term earnings power could be unaffected.
Be fearful when others are greedy and greedy when others are fearful
You can’t just willy-nilly buy pricey growth stocks and expect to come up with 100-baggers.
When you get lots of growth and a low multiple you get the twin engine of 100-baggers. That’s where you really get some great lift, with both factors working in your favor.
"It's far better to buy a wonderful business at fair price than a fair business at a wonderful price." -Warren Buffett
You ought to prefer to pay a healthy price for a fast-growing, high-return business (such as Monster) than a cheap price for a mediocre
Good stocks are seldom without friends. Hence, they are rarely cheap in the usual sense. Don’t let a seemingly high initial multiple scare you away from a great stock.
Don't just go for cheap stocks. Go for stocks that appear expensive but are in fact undervalued if properly analyzed.
I like ideas where the story is not obvious from the numbers alone. I want to find that something else is going on in the business that makes it attractive.
The best ideas are often the simplest. Wonderful businesses with pricing power.
e.g. AMZN/BABA: online shopping is a tidal wave
e.g. GOOG = the new Altria
“Never invest in any idea you can’t illustrate with a crayon.” -Peter Lynch
Combination of rising earnings and a higher multiple: the truly big return comes when you have both earnings growth and a rising multiple. Ideally, you’d have both working for you.
A low entry price relative to the company’s long-term profit potential is critical.
Why Warren Buffett bought APPL - growth stock w/ room for multiple expansion
“Never if you can help it take an investment action for a non-investment reason.”
Studying 100-baggers, then, comes down to studying growth
Autozone 100x: Ho-hum growth rates of 2–5 percent. Yet AutoZone bought back huge sums of stock, which powered earnings-per-share growth of 25 percent a year.
But be leery of buybacks and no sales growth. If you have a company with tons of cash flow but top-line [sales] growth is 5% or less, the stock doesn’t go anywhere. IBM is a good example. Good ROE. Cheap. But the absence of top-line growth means the decline in share count has been offset by multiple contraction. As a result, the stock goes nowhere.
Management
“In the ultimate analysis, it is the management alone which is the 100x alchemist.”
Top-management teams that made good capital decisions about how to invest company resources. There was often a large shareholder or an entrepreneurial founder involved.
Constant desire to grow a business is a key characteristic
Honest, rational, competent and avoids institutional imperative
Decentralized organizations release entrepreneurial energies
LBO model: focus on cash flow. Use leverage to acquire more properties. Improve operations. Pay down debt. And repeat.
When done right, buybacks can accelerate the compounding of returns.
When you find a company that drives its shares outstanding lower over time and seems to have a knack for buying at good prices, you should take a deeper look. You may have found a candidate for a 100-bagger.
When markets are high, there is no question that’s when the shysters like to come out and pick the pockets of complacent investors.
But when a man suspects any wrong, it sometimes happens that if he be already involved in the matter, he insensibly strives to cover up his suspicions even from himself.
“Whose bread I eat, his song I sing.” or “Don’t ask your barber if you need a haircut”
- [ ] Charlie Munger’s checklist against Psychology of Misjudgement
- [ ] First, do your work, and only then, talk with management
- [ ] Reading conference-call transcripts is better than listening to them
- [ ] Are questions ever evaded? Which ones?
- [ ] it’s the calls that go like this: “Great quarter, guys.” “Thanks, Mike.” If the transcript is filled with that and there are no pointed questions, then it “smells like a stage-managed call.
- [ ] Read several quarters at a time to look for disappearing initiatives, changes in language.
- [ ] Messy, indecipherable disclosures are clues to stay away. Obfuscation in accounting footnotes is a Red Flag.
ROIC
"Invert; always invert" -Charlie Munger
Finding what will become a 100-bagger is as much about knowing what not to buy as it is about knowing what to buy. The universe of what won’t work is large. Knocking out huge chunks of that universe will help make your search for 100-baggers easier.
“In Africa, where there are no antelope, there are no lions.”
“When looking for the biggest game, be not tempted to shoot at anything small.”
Don’t bother playing the game for eighths and quarters.
Don’t waste limited mental bandwidth on stocks that might pay a good yield or that might rise 30 percent or 50 percent.
You only have so much time and so many resources to devote to stock research. Focus your efforts on the big game: The elephants. The 100-baggers.
Over the long term, it’s hard for a stock to earn a much better return than the business which underlies it earns.
We’re looking for companies with very high returns on capital. That’s one of the key requirements 100-baggers must meet.
Monster shows us the power of high sales growth and building a brand and the potent mix of high sales growth and rising profit margins and rising return on equity.
Return on capital is extremely important. If a company can continue to reinvest at high rates of return, the stock (and earnings) compound . . . getting you that parabolic effect.”
What are the reinvestment dynamics of this business ?
Businesses that can reinvest their free cash flow in a manner that continues to earn above-average returns. You need a business with a high return on capital with the ability to reinvest and earn that high return on capital for years and years.
See something beyond the reported earnings e.g. AMZN: the power of sales growth and the ability to see something beyond the reported earnings.
How does the company finance its growth?
When a company can build book value per share over time at a high clip, that means it has the power to invest at high rates of return.
The rich have access to networks—through social and business connections—that give them better information. It helps them keep their edge over less connected peers.
Macro
Economists are probably the one group who make astrologers look like professionals when it comes to telling the future.
“Extraordinary performance comes only from correct non-consensus forecasts,”
We will continue to ignore political and economic forecasts which are an expensive distraction for many investors and businessmen.
The idea of wholesale shifts [in and out of the market at different stages of the business cycle] is for various reasons impracticable and undesirable.
Slumps are experiences to be lived through and survived with as much equanimity and patience as possible.
Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%. . . . But, surprise—none of these blockbuster events made the slightest dent in Ben Graham’s investment principles.
Lower prices, as found in such disasters, create “easier” opportunities to make hundredfold returns.
In 2008, when the stock market tanked, many people I know were afraid to invest.
Risk of losing one's job makes it difficult to commit additional risk capital during economic depression
“General markets tend to come back strongly in periods subsequent to price crashes! That was the case in 1932, 1937, 1962, 1974–75, 1980–82, 1987 and 2001–2002. A comeback also seems likely after the unprecedented crash of 2007–2008.”
The ultimate permanent impairment is when a firm goes out of business.
The best inflation fighters are 100-baggers.
The ideal business during an inflationary time is one that can (a) raise prices easily and (b) doesn’t require investment in a lot of assets.
These intellectual businesses are wonderful investments in both inflationary and disinflationary environment
Asset-heavy businesses generally earn low rates of return rates that often barely provide enough capital to fund the inflationary needs of the existing business, with nothing left over for real growth, for distribution to owners, or for acquisition of new businesses.
Destroy your best loved ideas
Looked forward to having his own ideas tested and knocked down:
I have no attachment to ideas. I have no problem changing my mind. In fact, I look forward to doing so and actively try to poke holes in my own ideas and theories. Be suspicious of abstractions.
Hunting for 100-baggers is completely independent of whatever is happening in the market. You should never stop looking for 100-baggers, bear market or bull.
Few bets, infrequent bets & big bets
Limiting his activities to buying only when he found intrinsic values far above stock prices.
Don’t be afraid to hold onto cash until you find those special 100-bagger opportunities. It’s good to have cash and not be afraid to buy when things look bad.
What is the "right" level of cash? Trade off b/w cash drag on returns vs cash optionality & not trading off a good night's sleep
Kelly's Formula/Kelly's Criterion = Expected net winnings / Net winnings if you win = edge/odds = W - [(1-W)/R] where W: winning probability; R: win/loss ratio
Better to own fewer stocks and more of your very best ideas than spread yourself too thin.
“Sorry to have gone too large on Elder Dempster. I was suffering from my chronic delusion that
one good share is safer than 10 bad ones.” -Lord Keynes
He rejected the idea, as Buffett and other great investors have, that you should dilute your best bets by holding a long list of stocks.
Tobin's Q/Sam Zell’s replacement cost
More zeal for consolidating businesses than for expanding them or initiating them. With stock prices low, the cash-rich investors in corporate America had a chance to steal some things. Why invest in new oil wells when you can buy them on the stock market for less than half of what it would cost you to drill new ones? Why build new factories when you can buy a competitor for 20 cents on the dollar?
March 2, 2019
I think there's a lot of good insight in this book - I'm not particularly impressed with the list of stocks that grew from 1 to 100 (the oldest ones were from 1932 - go to 1971... essentially about a 12% per year return). The value comes from pointing out some really fundamental aspects of financial markets and how people actually behave in those markets. So I recommend skipping over the endless figuring of numbers (I'm a numbers person, and it made -my- eyes glaze over)... and actually read if you see no fiddly numbers in the vicinity. (Nice round numbers are fine - he's working out an example in those). He has plenty to say about accounting tricks (important to know about!), inflation, and investor psychology. Pay close attention to that.
I read the version from 1971, and will try to get the more recent edition to make a comparison.
I read the version from 1971, and will try to get the more recent edition to make a comparison.
December 16, 2014
Real good book - difficult to get and expensive.
The book is simply focused on the inability of man to sit quietly in a room alone, peppered with beautiful examples and anecdotes of how stock of some companies, if you just held on to them even after they fell more than 50%, one would have still made 100x
Over long periods of time, he conveniently doesnt mention that it amount to 'only' 12-14% odd, but can be higher, and still be better than most active investors make.
What makes the book so good is that
a - it was written so long ago that its endearing to see the same values/ principles work today too
b - it makes the job in hindsight look extremely easy, which in fact is relatively easy if one behaved like a tree and counted weeks as days.
c - it's not too technical and speak very little about the nuances of finances, but talks a good bit about quality of earnings and quality of the company
One key takeaway - stay put, go on vacations and dont worry about fluctuating prices.
The book is simply focused on the inability of man to sit quietly in a room alone, peppered with beautiful examples and anecdotes of how stock of some companies, if you just held on to them even after they fell more than 50%, one would have still made 100x
Over long periods of time, he conveniently doesnt mention that it amount to 'only' 12-14% odd, but can be higher, and still be better than most active investors make.
What makes the book so good is that
a - it was written so long ago that its endearing to see the same values/ principles work today too
b - it makes the job in hindsight look extremely easy, which in fact is relatively easy if one behaved like a tree and counted weeks as days.
c - it's not too technical and speak very little about the nuances of finances, but talks a good bit about quality of earnings and quality of the company
One key takeaway - stay put, go on vacations and dont worry about fluctuating prices.
May 12, 2018
The book starts off dull acting like a database of stock returns in the past. I thought it boring for about half the book when the action really starts.
The topics he talks about are many a times missed out on in stock market books. He talks a lot about temperament, egonomics and how an egotist would rather lose money on his idea than make money on someone else's. He decomposes returns over and over into PE expansion and earnings growth and seems to suggest - if you want 100 times an investment you ought to get PE expansion too.
Overall, a good and a quick read.
The topics he talks about are many a times missed out on in stock market books. He talks a lot about temperament, egonomics and how an egotist would rather lose money on his idea than make money on someone else's. He decomposes returns over and over into PE expansion and earnings growth and seems to suggest - if you want 100 times an investment you ought to get PE expansion too.
Overall, a good and a quick read.
September 24, 2017
Every Buffet and Munger fan must read the book. Although Mr. Phelps tries hard to make the case for a 100 to 1 stock increase giving lots of examples, its the later part of the book where it gets interesting. Considering the book was written 1971, I consider it to be way ahead of its time as many of the ideas about investing discussed in the book are as relevant today as they were back then. A good read.
October 28, 2019
I finished this book on October 25, 2019. Overall this was an OK book - while the book was written nearly 50 years ago, the concepts in the novel to find “100-1” stocks in the stock market are still true to this day. This book could have been distilled into half of the pages and there are endless calculations in this book; nonetheless, it was a decent read (though I would highly recommend the more recent 100 Baggers for similar concepts and more updated stance on the book).
Here are the key takeaways I took from 100-1:
Page 4 - The “four” key investment criteria to find these type of growth stocks
Page 8 - To make money in stocks you must have the vision to see them, the courage to buy them and the patience to hold them. Patience is the rarest of the three.
Page 26 - To go from one to 100 in twenty-five years the price of a stock must increase at a compound annual rate of more than 20%, not including dividends.
Page 35 - Good assets = good potential earnings power
Page 79 - Growth stocks dissected in a thoughtful way
Page 92 - Figuring out the odds / three simple premises
Page 100 - The combination of rising earnings + rising price-earnings ratios = this is how you get great advances
Page 105 - Thoughtful chapter on why the quality of earnings matters when valuing a company
Page 125 - Market reaction and expectations story of Boys at Christmas good analogy
Page 133 - When asked how much it cost to run his yacht the Corsair, Mr. Morgan replied, if it matters, you can’t afford it (good story).
Page 177 - 8 areas to look for big winners - 1) inventions which enable us to do things we have always wanted to, but couldn’t, 2) new methods for doing things easier/faster/cheaper, 3) improve service while reducing labor to provide it, 4) new cheaper sources of energy, 5) new methods for doing less ecological damage, 6) improved methods for recycling, 7) new methods for delivery of papers (stuff), 8 - new methods for transporting people.
Page 179 - Other areas to look for big winners: advance from bear market, supply-demand ratio of basic commodity, great leverage and arithmetical result of re-investing earnings at substantially higher than average rates of return on invested capital.
Page 184 - shows all of the growth rates needed for 100-1 stocks (interesting to think about this and how this can be achieved)
Page 223 - for great companies, you have time on your side (never forget this!)
Page 233 - don’t forget the difference between activity and results - “a lot of shavings don’t make a good workman”
Page 246 - what makes a stock grow (good list here)
Here are the key takeaways I took from 100-1:
Page 4 - The “four” key investment criteria to find these type of growth stocks
Page 8 - To make money in stocks you must have the vision to see them, the courage to buy them and the patience to hold them. Patience is the rarest of the three.
Page 26 - To go from one to 100 in twenty-five years the price of a stock must increase at a compound annual rate of more than 20%, not including dividends.
Page 35 - Good assets = good potential earnings power
Page 79 - Growth stocks dissected in a thoughtful way
Page 92 - Figuring out the odds / three simple premises
Page 100 - The combination of rising earnings + rising price-earnings ratios = this is how you get great advances
Page 105 - Thoughtful chapter on why the quality of earnings matters when valuing a company
Page 125 - Market reaction and expectations story of Boys at Christmas good analogy
Page 133 - When asked how much it cost to run his yacht the Corsair, Mr. Morgan replied, if it matters, you can’t afford it (good story).
Page 177 - 8 areas to look for big winners - 1) inventions which enable us to do things we have always wanted to, but couldn’t, 2) new methods for doing things easier/faster/cheaper, 3) improve service while reducing labor to provide it, 4) new cheaper sources of energy, 5) new methods for doing less ecological damage, 6) improved methods for recycling, 7) new methods for delivery of papers (stuff), 8 - new methods for transporting people.
Page 179 - Other areas to look for big winners: advance from bear market, supply-demand ratio of basic commodity, great leverage and arithmetical result of re-investing earnings at substantially higher than average rates of return on invested capital.
Page 184 - shows all of the growth rates needed for 100-1 stocks (interesting to think about this and how this can be achieved)
Page 223 - for great companies, you have time on your side (never forget this!)
Page 233 - don’t forget the difference between activity and results - “a lot of shavings don’t make a good workman”
Page 246 - what makes a stock grow (good list here)
This entire review has been hidden because of spoilers.
January 8, 2017
Simple but powerful premise: buying great businesses and holding on. Highlights the importance of: (1) businesses that can grow earnings power, (2) benefit that can be gained from PE expansion as well as earnings growth, (3) buying at times of pessimism rather than optimism, (4) how difficult it is to hold investments for the long-term in the face of fluctuating performance, focus on short-term factors, contrasting views on future prospects and competing investment opportunities.
October 21, 2016
Buy good stocks and then HOLD them!
February 5, 2018
Recommended in Chuck Akre's talk at Google. Excellent read - written in the early 1970s but has aged very well.
May 5, 2025
For a book originally published in 1972, 100 to 1 in the Stock Market retains much of its value today, more than 50 years later. Written from the perspective of an experienced investment practitioner, this classic text is not about getting rich quickly, but rather about the steady path to wealth through the power of compounding, with many pearls of wisdom sprinkled along the way. The author emphasizes the importance of investing in the best ideas at reasonable price -- which, to me, most reliably means companies involved in new industries/processes/discoveries with high ROIC -- and holding on to those investments. Phelps provides a categorization of 100-baggers on p. 177-9 for those looking for a quick overview.
- "1. Stay with your most successful stock investments as long as the companies are increasing their earnings. 2. Never forget that people whose self-interest is diametrically opposed to your own are trying to persuade you to act every day. Who is talking often means more than what is said." p. 7
- "The art of speculation in one sense is the ability to recognize when a seeming risk is not a real risk or when a real risk is not nearly as great as the stock market anticipates." p. 86
- "One of the most persistent illusions of the business of investing is that information is all you need to make money. Organizations that sell information foster that illusion. It is good for their business." p. 87
- "Since for all men the visibility of the future is zero beyond this instant, assumptions as to how long observed trends will continue must be based on probabilities which in turn have been derived from the past and hence may not apply to the future. This is a long-winded way of saying that all estimates of the future are to some degree subjective... The business of the stock market is to cash in on the future now. Accordingly it is really not as important, short term, to know what sales and earnings are going to be five and ten years hence as to know what other investors are going to think they will be. In general the longer a trend continues the more people can be found willing to risk their savings on the proposition that it will continue longer still. As a practical matter then we probably should assume that old trends will persist longer than new trends simply because, whether they do or not, more investors will be inclined to assume that they will." p. 111
- "Never forget that a sovereign government and a minor child are unable to make contracts binding on themselves." p. 152
- "The bigger your computer, the more sophisticated your program, the more varied the assumptions you can evaluate. But when all is said and done, the future is still unknown, and always will be. That is why making assumptions and figuring the odds are crucial to investment success." p. 173
- "None of the 100-to-one fortune maker stocks of the last ten years were selling at high price-earnings ratios when opportunity beckoned. Their great price advances resulted from a compounding of earnings gains by multiplier gains." p. 220
-"It is a paradox that the investor seeking to multiply his capital by 100 actually runs less risk than the individual trying to make five points or even double his money. There are at least five reasons why this is so:
1) There is always a market for the best of anything... true of stocks and bonds as it is of real estate and antiques.
2) Buying for maximum long-term growth avoids pitfalls of underestimating other people...
3) When you buy a stock with a superior profit margin, an above-average rate of return on invested capital, and sales that are growing faster than the industry's or the country as a whole, you have time on your side. Never bet on a possibility against a certainty... time will correct many errors in what you pay for your initial investment.
4) The old saw about the world beating a path to the door of the man making better mouse traps may be corn but it is high protein corn.
5) 'Don't marry a man to reform him,' a wise mother counseled her daughter. It is seldom profitable to marry a stock to reform it either...
Perhaps the greatest advantage of all in buying top quality stocks without visible ceilings on their growth is that when we do so we give ourselves the chance to profit by the unforeseeable and incalculable." p. 223-4
- "The secret of success in your quest for 100-to-one stocks is to focus on earning power rather than prices. Can you do it?... Earning power is competitive strength. It is reflected in above-average rates of return on invested capital, above-average profit margins on sales, above-average rates of sales growth. It shows to best advantage in new or expanding markets." p. 231 and p. 251
- "1. Stay with your most successful stock investments as long as the companies are increasing their earnings. 2. Never forget that people whose self-interest is diametrically opposed to your own are trying to persuade you to act every day. Who is talking often means more than what is said." p. 7
- "The art of speculation in one sense is the ability to recognize when a seeming risk is not a real risk or when a real risk is not nearly as great as the stock market anticipates." p. 86
- "One of the most persistent illusions of the business of investing is that information is all you need to make money. Organizations that sell information foster that illusion. It is good for their business." p. 87
- "Since for all men the visibility of the future is zero beyond this instant, assumptions as to how long observed trends will continue must be based on probabilities which in turn have been derived from the past and hence may not apply to the future. This is a long-winded way of saying that all estimates of the future are to some degree subjective... The business of the stock market is to cash in on the future now. Accordingly it is really not as important, short term, to know what sales and earnings are going to be five and ten years hence as to know what other investors are going to think they will be. In general the longer a trend continues the more people can be found willing to risk their savings on the proposition that it will continue longer still. As a practical matter then we probably should assume that old trends will persist longer than new trends simply because, whether they do or not, more investors will be inclined to assume that they will." p. 111
- "Never forget that a sovereign government and a minor child are unable to make contracts binding on themselves." p. 152
- "The bigger your computer, the more sophisticated your program, the more varied the assumptions you can evaluate. But when all is said and done, the future is still unknown, and always will be. That is why making assumptions and figuring the odds are crucial to investment success." p. 173
- "None of the 100-to-one fortune maker stocks of the last ten years were selling at high price-earnings ratios when opportunity beckoned. Their great price advances resulted from a compounding of earnings gains by multiplier gains." p. 220
-"It is a paradox that the investor seeking to multiply his capital by 100 actually runs less risk than the individual trying to make five points or even double his money. There are at least five reasons why this is so:
1) There is always a market for the best of anything... true of stocks and bonds as it is of real estate and antiques.
2) Buying for maximum long-term growth avoids pitfalls of underestimating other people...
3) When you buy a stock with a superior profit margin, an above-average rate of return on invested capital, and sales that are growing faster than the industry's or the country as a whole, you have time on your side. Never bet on a possibility against a certainty... time will correct many errors in what you pay for your initial investment.
4) The old saw about the world beating a path to the door of the man making better mouse traps may be corn but it is high protein corn.
5) 'Don't marry a man to reform him,' a wise mother counseled her daughter. It is seldom profitable to marry a stock to reform it either...
Perhaps the greatest advantage of all in buying top quality stocks without visible ceilings on their growth is that when we do so we give ourselves the chance to profit by the unforeseeable and incalculable." p. 223-4
- "The secret of success in your quest for 100-to-one stocks is to focus on earning power rather than prices. Can you do it?... Earning power is competitive strength. It is reflected in above-average rates of return on invested capital, above-average profit margins on sales, above-average rates of sales growth. It shows to best advantage in new or expanding markets." p. 231 and p. 251
December 27, 2021
Title could have been Patience to 💯
What my 👂 heard ⤵️
some can't fight the urge to cash in their winnings however small
the dog lost a piece of meat in his mouth by snapping had a seemingly larger piece reflected in the water Aesop's fable
are you still looking for financial worlds to conquer?
it hurts our ego to see someone out distancing us like that
remember this dictum... to make money in stocks you must have the vision to see them the courage to buy them and the patience to hold them.. patience is the rarest of the three
you want to know if you'll be rich? the answer is.. can you save money?
looking for a vehicle I can ride a small stake 2 a fortune
every stock sale is a confession of error
lost opportunity or trading profits??
an unrecognized investment fallacy is that an avoidance of risk is more important than a seizure of opportunity
selling too soon can be frighteningly expensive
the problem with you is not that your ignorant it's that you know so much that ain't so
if you really think a stock is attractive bite at the market and then if it goes down in price by more if you can.. the difference between making 40 times your investment and 60 times your investment is not nearly as important as missing the opportunity all together.
don't let bear market smoke get into your eyes and blind you to buying opportunities
most deception is bad but self deception is worse.
if the sky was raining soup you'd have a fork Teddy
a tree does not grow to the sky that kind of growth for a company isn't realistic
a lemon that has been flattened by a steamroller has more juice in it and a piece of information the stock market has already discounted
the reason you have mice and cockroaches is because what they feed on is there in the dirty kitchen
if all men were honest there would be less crowding in our jails
even manipulators know better than to try to make water run uphilhill
he profits most who serves best
problems are opportunities in work clothes
Bet that just this once against the end of the world if you lose there will be no one around to collect
What my 👂 heard ⤵️
some can't fight the urge to cash in their winnings however small
the dog lost a piece of meat in his mouth by snapping had a seemingly larger piece reflected in the water Aesop's fable
are you still looking for financial worlds to conquer?
it hurts our ego to see someone out distancing us like that
remember this dictum... to make money in stocks you must have the vision to see them the courage to buy them and the patience to hold them.. patience is the rarest of the three
you want to know if you'll be rich? the answer is.. can you save money?
looking for a vehicle I can ride a small stake 2 a fortune
every stock sale is a confession of error
lost opportunity or trading profits??
an unrecognized investment fallacy is that an avoidance of risk is more important than a seizure of opportunity
selling too soon can be frighteningly expensive
the problem with you is not that your ignorant it's that you know so much that ain't so
if you really think a stock is attractive bite at the market and then if it goes down in price by more if you can.. the difference between making 40 times your investment and 60 times your investment is not nearly as important as missing the opportunity all together.
don't let bear market smoke get into your eyes and blind you to buying opportunities
most deception is bad but self deception is worse.
if the sky was raining soup you'd have a fork Teddy
a tree does not grow to the sky that kind of growth for a company isn't realistic
a lemon that has been flattened by a steamroller has more juice in it and a piece of information the stock market has already discounted
the reason you have mice and cockroaches is because what they feed on is there in the dirty kitchen
if all men were honest there would be less crowding in our jails
even manipulators know better than to try to make water run uphilhill
he profits most who serves best
problems are opportunities in work clothes
Bet that just this once against the end of the world if you lose there will be no one around to collect
February 23, 2024
It is no surprise this is a favorite of Mohnish Pabrai, Chuck Akre and Chris Mayer. The mightiest lesson of this story comes from the following excerpt:
Five poor Arabs slept on the sand. A bright light woke them out of it came an angel. “Each of you can have one wish, ” the angel said. “Praise be to Allah,” exulted the first Arab to catch his breath. “Give me a donkey.” Instantly a donkey stood at his side. “Fool,” thought the second Arab. “He should have asked for more.” “Give me ten donkeys.” the second Arab begged. No sooner said than done. He had ten donkeys. The third Arab had heard and seen how the first two had fared. “To Allah all things are possible,” he said. “Give me a caravan with a hundred camels, a hundred donkeys, tents, rugs, food, wine, and servants.” They came so fast that the third Arab was ashamed to be seen in his rags before such an entourage. But his shame did not last long. Deftly his servants dressed him in robes befitting his new status. The fourth Arab was more than ready when his turn came. “Make me a king,” he commanded. So quickly did the crown appear on his head that he bruised his knuckles scratching where an instant before there had been nothing but an itch. The palace gardens stretched out before him almost as far as the eye could see, and the palace turrets reached so high their pennants were lost in the desert haze. Having seen his companions in misery ask too little, the fifth Arab resolved to make no such mistake. “Make me Allah!” he ordered. In a flash he found himself naked on the sand, covered with leprous sores.
The moral, of course, is that those of us who ask little of life get little. Those who ask much get much. Those who ask too much get nothing”
Five poor Arabs slept on the sand. A bright light woke them out of it came an angel. “Each of you can have one wish, ” the angel said. “Praise be to Allah,” exulted the first Arab to catch his breath. “Give me a donkey.” Instantly a donkey stood at his side. “Fool,” thought the second Arab. “He should have asked for more.” “Give me ten donkeys.” the second Arab begged. No sooner said than done. He had ten donkeys. The third Arab had heard and seen how the first two had fared. “To Allah all things are possible,” he said. “Give me a caravan with a hundred camels, a hundred donkeys, tents, rugs, food, wine, and servants.” They came so fast that the third Arab was ashamed to be seen in his rags before such an entourage. But his shame did not last long. Deftly his servants dressed him in robes befitting his new status. The fourth Arab was more than ready when his turn came. “Make me a king,” he commanded. So quickly did the crown appear on his head that he bruised his knuckles scratching where an instant before there had been nothing but an itch. The palace gardens stretched out before him almost as far as the eye could see, and the palace turrets reached so high their pennants were lost in the desert haze. Having seen his companions in misery ask too little, the fifth Arab resolved to make no such mistake. “Make me Allah!” he ordered. In a flash he found himself naked on the sand, covered with leprous sores.
The moral, of course, is that those of us who ask little of life get little. Those who ask much get much. Those who ask too much get nothing”
October 1, 2021
I read this book after hearing about it from one of my favorite investors, Mohnish Pabrai, and reading another book that was inspired by it, Chris Meyer's 100 Baggers. This was written in the early 1970's and has held up really well over that time. Here are some things I loved about it:
* The central idea was excellent. Buy and hold for the long term, and its possible to make 100x on your stocks with a long enough time line and discipline. He proves this by listing all of the stocks over the 40 years before the book was published where you could have done just that.
* His list of what to look for in stocks that have a chance to become 100 baggers is a great starting point.
* I loved his explanations of debt, inflation, interest, etc. Some of the clearest writing on these topics I've read anywhere.
All that said, I think that the real gems in this book are scattered throughout with some repetitive text showing that the 100 baggers exist. At the time it was written, that was necessary - now with new technology, you can check all of the math and data instantly. Recommended.
* The central idea was excellent. Buy and hold for the long term, and its possible to make 100x on your stocks with a long enough time line and discipline. He proves this by listing all of the stocks over the 40 years before the book was published where you could have done just that.
* His list of what to look for in stocks that have a chance to become 100 baggers is a great starting point.
* I loved his explanations of debt, inflation, interest, etc. Some of the clearest writing on these topics I've read anywhere.
All that said, I think that the real gems in this book are scattered throughout with some repetitive text showing that the 100 baggers exist. At the time it was written, that was necessary - now with new technology, you can check all of the math and data instantly. Recommended.
May 19, 2022
Clearly knowledgeable guy, but two words: hidgsight bias. Yes, he admits it, but that doesn't make it any less cumbersome to be barraged by "could haves" and endless reports on historic price changes. I'm familiar with being able to 100x on your investment (did so on Bitcoin but that doesn't count). Is it a pipe dream for stocks? I'm happy with a consistent 10% annualized. I don't think it should be a sole goal to aim for 100-fold increases, it could result in a very narrow and greedy selection and one may be missing other, more stable income generating opportunities. If you got a lot and spend little, even a few percent such as a dividend payments can be enough. He is not selling a pipe dream, but brings lots of examples that it's possible. A key message is buy right and hold: here and there there are gold nuggets of wisdom, all of which I've already learned about from my "stock guy", but was worth repeating. Not the shortest of books, but the public really needs to hear it. Brings up good points for investing and against trading and being too active.
January 7, 2023
STAY WITH YOUR MOST SUCCESSFUL STOCK INVESTMENTS AS LONG AS THE COMPANIES ARE INCREASING THEIR EARNINGS.
NONE OF THE 100-1 FORTUNE COMPANIES WERE TRADING AT HIGH PES wHEN OPPORTUNITY BECKONED.
Fortunes are made by buying right and holding on.
To make money in stocks you must have the vision to see them, the courage to buy them and the patience to hold them. Patience is the rarest of the 3.
The shorter the time a stock has been held before it's sold the more palable the error in buying it.
Nothing kills a moneymaking opportunity faster than its widespread popularity.
When any rule or formula becomes a substitute for thought rather than an aid to thinking, it's dangerous and should be discarded.
He profits most who serves best.
You want management who are; knowledgeable, diligent and if integrity.
Beware of the one-man company, it's only a heartbeat away from deep trouble.
Masco sold on 3x PE in 1961 and 38x in 1969. Share price increased 14x based on re rating. To get to 100x the earnings only need to increase 7x, not 100x.
NONE OF THE 100-1 FORTUNE COMPANIES WERE TRADING AT HIGH PES wHEN OPPORTUNITY BECKONED.
Fortunes are made by buying right and holding on.
To make money in stocks you must have the vision to see them, the courage to buy them and the patience to hold them. Patience is the rarest of the 3.
The shorter the time a stock has been held before it's sold the more palable the error in buying it.
Nothing kills a moneymaking opportunity faster than its widespread popularity.
When any rule or formula becomes a substitute for thought rather than an aid to thinking, it's dangerous and should be discarded.
He profits most who serves best.
You want management who are; knowledgeable, diligent and if integrity.
Beware of the one-man company, it's only a heartbeat away from deep trouble.
Masco sold on 3x PE in 1961 and 38x in 1969. Share price increased 14x based on re rating. To get to 100x the earnings only need to increase 7x, not 100x.
This entire review has been hidden because of spoilers.
January 10, 2026
Reflecting carefully on the 100x case studies from 1936-1971 reveals nearly four decades of changes across many industries! Kodak, Xerox, IBM, Occidental...
However, Charlie Munger might say that investing in these was just like 'surfing a tidal wave,' rather than having a deep, meticulous understanding of them. Predicting the business models and true potential of companies like Kodak or Xerox in the 1940s was something very few people could do—let alone having a vision that spanned one or two decades.
Maybe my own judgment is a bit naive because I wasn't born in the US at that time, so it is hard to be completely objective.
Aside from a few small doubts and questions, Thomas W. Phelps really helped me make a small step forward in my investing mindset regarding the 'Quality of Earnings.' This was especially clear in Chapter X, where he reflects on companies that look identical in terms of market, revenue, and profit.
There are still many interesting things to think about carefully! A very fascinating book!"
However, Charlie Munger might say that investing in these was just like 'surfing a tidal wave,' rather than having a deep, meticulous understanding of them. Predicting the business models and true potential of companies like Kodak or Xerox in the 1940s was something very few people could do—let alone having a vision that spanned one or two decades.
Maybe my own judgment is a bit naive because I wasn't born in the US at that time, so it is hard to be completely objective.
Aside from a few small doubts and questions, Thomas W. Phelps really helped me make a small step forward in my investing mindset regarding the 'Quality of Earnings.' This was especially clear in Chapter X, where he reflects on companies that look identical in terms of market, revenue, and profit.
There are still many interesting things to think about carefully! A very fascinating book!"
November 10, 2024
"100 to 1 in the Stock Market" by Thomas William Phelps is an insightful book that offers expert advice on maximizing investment opportunities. As an expert security analyst, Phelps shares his valuable expertise to help readers make informed decisions and achieve significant returns.
The book focuses on strategies for identifying and investing in stocks with high growth potential, emphasizing the importance of thorough research and analysis. Phelps also discusses the need for patience, discipline, and a long-term perspective when navigating the stock market.
Key Takeaways:
• Identifying High-Growth Stocks:
Phelps provides guidance on recognizing companies with strong potential for growth and expansion.
• Investment Strategies: The book outlines effective strategies for managing risk, diversifying portfolios, and maximizing returns.
• Market Analysis: Phelps offers insights into market trends, economic indicators, and other factors influencing stock performance.
The book focuses on strategies for identifying and investing in stocks with high growth potential, emphasizing the importance of thorough research and analysis. Phelps also discusses the need for patience, discipline, and a long-term perspective when navigating the stock market.
Key Takeaways:
• Identifying High-Growth Stocks:
Phelps provides guidance on recognizing companies with strong potential for growth and expansion.
• Investment Strategies: The book outlines effective strategies for managing risk, diversifying portfolios, and maximizing returns.
• Market Analysis: Phelps offers insights into market trends, economic indicators, and other factors influencing stock performance.
November 27, 2022
If you are capable of reading and understanding "Intelligent Investor" by Benjamin Graham, then you should also add this book in your reading list. The following things are to be noted before reading.
1) The book is written around 50 years ago; before Nixon shock and well before the introduction of derivatives. So, this book should be used only as a means to understand the basic observations about stock market.
2) The author seems to model himself after Benjamin Graham. So, a lot of examples are provided which requires patience to read and understand. Hence try to read one chapter at a time, instead of straight continuous reading.
3) If you think the initial chapters are not worth your taste, then please try to read Chapter 15 (Profits in Ethics) and Chapter 17 (No Inflation Control Pill). These two chapters alone will make your purchase of this book justified.
1) The book is written around 50 years ago; before Nixon shock and well before the introduction of derivatives. So, this book should be used only as a means to understand the basic observations about stock market.
2) The author seems to model himself after Benjamin Graham. So, a lot of examples are provided which requires patience to read and understand. Hence try to read one chapter at a time, instead of straight continuous reading.
3) If you think the initial chapters are not worth your taste, then please try to read Chapter 15 (Profits in Ethics) and Chapter 17 (No Inflation Control Pill). These two chapters alone will make your purchase of this book justified.
January 19, 2025
It distills profound investing wisdom into clear, practical advice: buy quality stocks and hold them long enough to let compounding work its magic. Like Charlie Munger, Phelps conveys timeless wisdom with sharp clarity, using entertaining and memorable stories to show how simple truths hold profound power. The examples may be old, but the principles are timeless—patience, foresight, and the discipline to do nothing when nothing needs doing. This is not just a book about stocks; it’s a manual for cultivating a long-term mindset.
October 23, 2022
The main premise of this book is "buy right and hold on". The whole book is full with examples of $10,000 investment would become $1 million or more. The only thing that someone had to do is buy the right companies, when they were still growing, were relatively cheap etc, and to hold on to them for many many year (in many cases for decades). The rest of the book is a good analysis / opinion, of why this is the correct approach to the stock market.
Read
July 21, 2021To make money stocks you must have “the vision to see them, the courage to buy them, and the patience to see it rise.” Patience is the rarest of all three.
Far more money can be made from good stock selection than by good stock market timing.
Usually the faster an error is rectified the less it costs.
Far more money can be made from good stock selection than by good stock market timing.
Usually the faster an error is rectified the less it costs.
November 8, 2023
A classic investment book with a simple idea: the most money is made from buying right and holding on for the long term (including holding through many dips) - and there are opportunities every year to buy a company that will deliver 100x returns.
The book is a bit repetitive, but the core message is so important that it’s worth reading to really internalize it.
The book is a bit repetitive, but the core message is so important that it’s worth reading to really internalize it.
May 23, 2021
An introduction to fundamental analysis to stock trading. Very sparse on the numerical examples, for example not a single balance sheet is shown, and with some graphs of stock prices having no relevance now and all of which are going up. There is even a chapter called "Why computers wont run the world [ie: stock market]", and the statement is made by the author who could not have realised that the securities world looks vastly different now.
July 7, 2021
Mohnish Pabrai recomended reading this book and I'm glad I did. It was writen 50 years ago and has held up very well I think because it covers timeless topics in interesting ways by breaking them down cleaverly, simplely and often with a Joke or a relatable story.
Great read!
Great read!
January 14, 2023
A study case of stocks which could be purchased from 1932 through 1967 at 1.0% of its market value in 1971, drawing commonalities among them and psychological traits to buy right and sit tight throughout the years.
May 24, 2023
"Those of us who ask little of life get little. Those who ask much get much. Those who ask too much get nothing."
"Never mind opinions. Try to get the reasons for them, the assumptions underlying them"
"The fact without the truth is false. Always connect"
"Never mind opinions. Try to get the reasons for them, the assumptions underlying them"
"The fact without the truth is false. Always connect"
August 19, 2024
good book to think about stock market
It is a good book to see an examples of 110 to 1 growth in the last century. To think about what made some companies so outstanding and how to spot them in the current market.
It is a good book to see an examples of 110 to 1 growth in the last century. To think about what made some companies so outstanding and how to spot them in the current market.
October 27, 2024
Those looking to learn about standout equity holdings in the past will do well by reading this book. This book is well researched and provides valuable lessons for investors looking to study the most successful investments from the 1920s-1970s.
May 18, 2025
中文翻譯品質不太好，閱讀起來有點艱澀，明明有些字句可以用更簡潔的方式敘述，感覺翻譯者就是逐句照翻。
撇開翻譯品質不論，整本書的含金量我認為蠻高的，它不流於只談原則和價值觀，也不會將重要的數據輕輕帶過；相反地，作者非常用心地說明每個數據的重要性、怎麼來的，以及可能產生的盲點；就像是一個熱衷教學的老師孜孜不倦地教導學生。
雖然已經是五十年前的書籍了，但是裡面有許多方法在現在的投資市場依然管用。
撇開翻譯品質不論，整本書的含金量我認為蠻高的，它不流於只談原則和價值觀，也不會將重要的數據輕輕帶過；相反地，作者非常用心地說明每個數據的重要性、怎麼來的，以及可能產生的盲點；就像是一個熱衷教學的老師孜孜不倦地教導學生。
雖然已經是五十年前的書籍了，但是裡面有許多方法在現在的投資市場依然管用。
March 20, 2018
Buy and hold well explained. Keeping the right stocks is the key to make 100x returns.
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