10 Bagger Rule – Stock Market Terms Explained
★ SUMMARY ★
If you’ve never heard about this term it was really coined up by Peter Lynch in his book One Up On Wall Street. This book really defines the 10 bagger really associated to baseball bag being a base and then when you add up doing two home runs and it double you get 10.
Really the rule can be applied to any sort of investment or anything that appreciates tenfold or a ten times. For example if you had something that was $10 per share and then it appreciated ten times you would be at $100 per share.
Now if you take that same concept and you say a stock opened up for trading at $20 per share went up 10 times then that would put it at $200 per share. In other words it’s a nine hundred percent increase in the investment so
Initially this concept or this term of the 10 bagger doesn’t really seem that attractive or as exciting as you’re just talking about hey I purchase the stock here then it went up 900% or 10 times it seems fantastic.
Really where this concept starts to get that aha!, moment really you start to realize well I don’t really have to trade a lot and that’s the big aha! moment that’s really where you benefit from understanding this rule and concept.
Taking in account this Ten Bagger Rule or this ten better term, here’s what happens if you have an investment that you go in and you go ahead and make a trade and it goes up ten times or a ten-fold so let’s say you have a $10,000 investment and it goes up ten times now you’re up at $100,000.
you take that same investment and do that one more time in your life and you’re up to $1,000,000. So if you have 10 baggers, two home runs and a double you basically go out with a million dollars so that’s from two major stock trades or two major investment and you’re out one million dollars.
Posted at: http://tradersfly.com/2015/12/10-bagger-rule-stock-market-terms/
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