Mohnish Pabrai shares his experience of chasing 100-baggers

There is an elderly Chinese woman who invested 50k¥ in 2008 into Changchun High-Tech Industries Inc (https://finance.yahoo.com/quote/000661.SZ/.... And She made 100x of her investment after 13 years. So 50k¥ became 5M¥. She was not a professional investor and pretty much didn't know much about the company. She just invested her money based on the recommendation of her stockbroker. Changchun High-Tech Industries Inc produced hormones. It was and is still traded on the Shenzhen stock exchange. She never sold the stock in 13 years, because she went abroad and forgot her account password. This proved so many points: if value investing is dead or you need diversification or getting a 10-bagger is based on pure luck. She averaged about 42% CAGR. And there are no capital gains taxes in China. So she beat the return of ~5% CAGR of the Shenzhen stock market (1750 to 3500) and even the best in the world including Warren Buffett by investing in 1 single stock. But there is always luck in every investment. There were ~1600 public companies in China around 2008. And only 86 of them made 10x in 13 years. So she had a 86/1600 = 5.375% chance to get a 10x. The filter of the broker at that time must be a fairly good one. That is also why the woman almost had a heart attack as she liquidated her investment entirely in 2021. #investing #valueinvesting 【Playlist】:    • Mohnish Pabrai