100-Baggers: Stocks that Return 100-to-1 and How to Find Them
May 20, 2024
4 min read
đź“š arvy's Book Club
arvy's Teaser: A 100-bagger is a stock that turns $1 into $100. It sounds impossible — but Chris Mayer studied every stock that achieved it and found a pattern: high returns on capital, owner-operators with skin in the game, long runways for growth, and — most importantly — an investor patient enough to hold for 20+ years. The hardest part of a 100-bagger isn't finding it. It's not selling it.
The Book in 60 Seconds
100-Baggers: Stocks that Return 100-to-1 and How to Find Them (2015) by Chris Mayer studies every stock that returned 100x or more over a 50-year period. Mayer identifies the common characteristics: high and rising returns on equity (ROE), founder-led management with significant ownership ("skin in the game"), small-to-mid cap size with long growth runways, and — critically — a holding period that averaged 26 years. The book is a love letter to patience and conviction.
Chris Mayer · 2015 · Investing, Compounding & Stock Selection
Idea 1: The Twin Engines — High ROE + Long Runway = 100x
Mayer's key finding: 100-baggers are driven by two forces: high returns on equity (ROE) and long growth runways. A company that earns 20% ROE and can reinvest those earnings at the same rate for 25 years will compound at extraordinary rates. The math is simple — it's the patience that's hard.
ROE is the engine. The runway is the fuel. A company that earns 20% ROE but runs out of reinvestment opportunities after 5 years is a good stock. A company that earns 20% ROE and can reinvest for 25 years is a 100-bagger.
The Investor Lesson
Look for companies with consistently high ROE that can reinvest at those rates for decades. These are the compounding machines. In arvy's portfolio: companies like Visa, LVMH, Microsoft, and ASML have both the ROE engine and the long runway. (→ Quality Investing)
Idea 2: Skin in the Game — Owner-Operators Outperform
Mayer finds that a disproportionate share of 100-baggers are founder-led or owner-operated. When management owns significant equity, their incentives align with shareholders. They think in decades, not quarters. They reinvest aggressively. They don't empire-build or overpay for acquisitions — because it's their money too.
The best predictor of future performance isn't past earnings. It's how much of their own money the CEO has in the stock.
The Investor Lesson
Check insider ownership. CEOs and founders who own significant equity are incentivised to compound — not to extract. Hermès (family-controlled), Nvidia (Jensen Huang), Berkshire (Buffett) — the greatest compounders have leaders who eat their own cooking. (→ Steve Jobs)
Idea 3: The Hardest Part — Not Selling
Mayer's most important insight: the average 100-bagger took 26 years. During those 26 years, the stock dropped 30-50% multiple times. Every drop felt like the end. Every recovery took months or years. The investors who achieved 100x returns weren't smarter — they were simply more patient. They didn't sell.
The Investor Lesson
The biggest threat to your returns isn't a crash — it's selling during a crash. The average 100-bagger endured multiple 50% drawdowns on its way to 100x. The investor who sold at -40% missed 100x. The one who held got there. Switzerland's tax-free capital gains reward exactly this patience. (→ Savings Plan)
What This Means for Swiss Investors
| 100-Bagger Principle | Swiss Application |
|---|---|
| High ROE + long runway | Invest in companies with 15%+ ROE that can reinvest for decades. Quality investing screens for exactly this. |
| Skin in the game | Check insider ownership. Swiss family-controlled companies (Roche, Schindler, Swatch) often have significant insider stakes. |
| Don't sell | Tax-free capital gains in Switzerland = the ultimate reward for patience. Hold through drawdowns. Let decades do the work. |
arvy's Take
What holds up: The most direct case for patient, quality-focused investing ever written. Mayer's data is compelling: high ROE, long runways, founder leadership, and extreme patience are the ingredients of extraordinary returns. The "don't sell" lesson alone is worth the price of the book — and the hardest lesson most investors will ever learn.
What's missing: Survivorship bias is real — for every 100-bagger, thousands of stocks went to zero. Mayer focuses on winners without equally studying losers. And the 26-year holding period is aspirational for most investors.
What we'd add: You probably won't find a single 100-bagger. But a diversified portfolio of 25-30 quality companies — each with high ROE, long runways, and strong management — gives you multiple shots at compounders. You don't need 100x on one stock. You need consistent 10-15% annual returns across a portfolio. That's what quality investing delivers.
3 Sentences to Remember
1. High ROE + long runway = extraordinary compounding. The math is simple. The patience is hard.
2. Invest in companies where management has skin in the game. Founder-operators think in decades, not quarters.
3. The hardest part is not selling. The average 100-bagger took 26 years and endured multiple 50% drops along the way.
Buy the book
Also in Book Club: Common Stocks & Uncommon Profits → · Investing from Darwin →
Quality compounds. Patience multiplies.
High-ROE companies with long runways. Founder-led management. Tax-free compounding for decades. From CHF 1/month.
This article was written by Patrick Rissi, CFA, Co-Founder of arvy, and reviewed by Thierry Borgeat and Florian Jauch, CFA.
Disclaimer: This article is for general informational purposes only and does not constitute personal investment advice. Amazon links are affiliate links. arvy is a FINMA-supervised asset manager.
