Equities: It's Hard To Hold A 10-Bagger

I had a friend who was the only person I knew personally to have two different publicly traded stocks go 100x on the money and this is exactly the point he would make when giving talks on investing.

From The Irrelevant Investor (Ritholtz Wealth Management):

Looking For a Ten Bagger?

The other day I looked at a common theme among the decade’s biggest winners; they tended to be very expensive relative to their peers based on traditional valuation metrics. Today I want to look at another trait these winners share, volatility and big drawdowns.

A few things really stand out in this table.

• Nine of the ten biggest winners were all cut in half. Granted, the S&P 500 was as well, but the point is that even the best stocks gave investors plenty of sleepless nights.
• Even though these winners returned 23x what the S&P 500 did, only Apple and Priceline hit all-time highs more often.
• The average standard deviation for these stocks was more than twice that of the S&P 500. No pain, no gain.
• These stocks spent on average 34% of the time in “bear market territory.” That’s pretty wild. One out of every three days these stocks were at least 20% off their all-time high....MORE

HT: Newmark's Door