# The art of entering and exiting a multibagger



## burglar (29 May 2012)

My mentor called it "Riding the Tiger!"

You can't stay on ... you can't get off!


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## burglar (29 May 2012)

*Re: Multi Bagger*

What bothers me about these stellar stocks is that newbs get on them, not knowing how to get off.

Take some profit along the way!!


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## drew70 (29 May 2012)

*Re: Multi Bagger*

excellent discription.


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## tech/a (29 May 2012)

*Re: Multi Bagger*

This is how you get off.
All you have to do is use it.


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## burglar (29 May 2012)

*Re: Multi Bagger*

Here is one that got away from me!


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## Joe Blow (29 May 2012)

*Re: Multi Bagger*

Hi Burglar, just wondering what purpose you meant this thread to have. What is it that you want to discuss about multibaggers?

I think this thread might need to be retitled and the discussion refocused.


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## burglar (29 May 2012)

*Re: Multi Bagger*



Joe Blow said:


> Hi Burglar, just wondering what purpose you meant this thread to have. What is it that you want to discuss about multibaggers?
> 
> I think this thread might need to be retitled and the discussion refocused.




If you asking what has prompted me to start this thread:

Pumping til newbs get on board, thence dumping.
Not against it per se, just warning of the dangers.

Expected some lively chatter re entry and exit strategy.
Trailing stops and crystal balls?
but instead got a picture of a rodent. Oh well! 
A picture paints a thousand words!!


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## Joe Blow (29 May 2012)

*Re: Multi Bagger*



burglar said:


> If you asking what has prompted me to start this thread:
> 
> Pumping til newbs get on board, thence dumping.
> Not against it per se, just warning of the dangers.
> ...





So is it the pumping and dumping of multibaggers or how to spot a multibagger that you'd like to discuss? I think we need a more specific thread title.


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## burglar (29 May 2012)

*Re: Multi Bagger*



Joe Blow said:


> So is it the pumping and dumping of multibaggers or how to spot a multibagger that you'd like to discuss? I think we need a more specific thread title.




In my example, FCN Falcon Resources were the market darling of November 2004

in the morning they reached $1.47, by afternoon down around $1.20

No one sent me a telegram. Thats my point, I think!
No one tells you when the lift reaches the top floor. 

Am I making sense?


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## Joe Blow (29 May 2012)

*Re: Multi Bagger*



burglar said:


> In my example, FCN Falcon Resources were the market darling of November 2004
> 
> in the morning they reached $1.47, by afternoon down around $1.20
> 
> ...




OK, I think I understand. I have renamed the thread to be more specific so we can focus the discussion. In web searches I have noticed that multibagger is usually one word so I have modified that as well.


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## burglar (29 May 2012)

*Re: Multi Bagger*



Joe Blow said:


> OK, I think I understand. I have renamed the thread to be more specific so we can focus the discussion. In web searches I have noticed that multibagger is usually one word so I have modified that as well.




Thanks Joe!

Once I saw the photo of the mouse, I thought the thread was dead!
Having seen your interest, perhaps it is a worthwhile topic!


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## TMC93 (29 May 2012)

Personally, i only invest in small-mid caps so this is an issue i have come across a few times. I nearly always take part profits and leave the rest in. I just don't have the skill to pick when a run has come to an end. Easy in hindsight but hard in foresight.


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## tigerboi (29 May 2012)

i think the art is not just to spot the potential big bagger but to hold your nerve

when others are looking to exit.

for example i like a new tech company listed not long ago BCT its product is 

called bluechiip which is a tracking device for use in the medical industry.

im going to get in now with all the smart money & yes it may take time

but holders will be rewarded as for an exit just set yourself a price you think

is best value.

dont forget BCT is a tigerboi quadzillion bagger...tb


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## Junior (29 May 2012)

I often think about this.  Not having studied T/A to any great depth, I'd like to have a simple plan in place... 

i.e. 'if SP doubles sell half'.  Recover the original investment and let the rest ride...but for how long?  

If the stock doubles in price again do you take more profit or just sit on it?  

If you have conducted significant F/A then maybe your exit point is based more around fundamentals. 

Why did you buy in the first place?  It could be that you saw potential in the company that the broader investment world wasn't aware of, if the market becomes more aware of the potential of the company, and hence the SP explodes, maybe that is the time to significantly reduce exposure, and look for the next future multibagger.



Tough questions.  Would be nice to be in the position to have to ask them.


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## sinner (29 May 2012)

Whatever you do, don't do this

http://www.scribd.com/ValueWalk/d/47552460-Jeremy-Grantham-GMO




> Newtonhad the great good luck to get into the South Sea Bubble early. He made a really decent investment and a very quick killing, which mattered to him. It was enough to count. He then got out, and suffered the most painful experience thatcan happen in investing: he watched all of his friends getting disgustingly rich. He lost his cool and got back in, but tomake up for lost time, he got back in with a whole lot more (some of it borrowed), nicely caught the decline, and wastotally wiped out. And he is reported to have said something like, “I can calculate the movement of heavenly bodies butnot the madness of men.


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## tech/a (29 May 2012)

https://www.aussiestockforums.com/forums/showthread.php?t=4650

Did a heap on this 6 years ago


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## Purple XS2 (29 May 2012)

For a potential multibagger, I try to set a dream scenario before I buy in, a sort of inverse to capital exposed:
So for example: I put in $1,000 - if it doubles, oh joy -  sell half and be free carried on a stake now worth the original buy-in - get out quick on the first sign of weakness, because that second sell is your profit.

For bigger stakes, sell a smaller fraction, but sell sooner and settle for a nice profit (say, 33%, on 1/3 original holding?) Again, sell most of the remainder on the first sign of a stall.

The simple fact is that a good profit is much, much more likely to disappear than to double again. Always be be prepared to take at least some off the table. Greed may be good, but it needs to be contained lest it do you in. The rise is so much more (NB: more, not less! ) enjoyable when you've actually stashed some of it.

And finally, I've been playing this game for about 7 years, just in time to get a bit too cocky for the GFC (Mk 1). I've only caught 1 true multibagger ($x * 4, CDY, November 2010), and yes, I could have in theory made more, but the stash that I banked saved my bacon - if I'd played it hard, I would have been left with burnt toast.


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## sinner (29 May 2012)

tech/a said:


> https://www.aussiestockforums.com/forums/showthread.php?t=4650
> 
> Did a heap on this 6 years ago




Just had a look, that's a great thread.


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## burglar (30 May 2012)

sinner said:


> Just had a look, that's a great thread.




Agree with you sinner,

I don't know how these good threads end up in the basement.

tech/a 
What a coincidence to find FCN Falcon in your thread.

I did a double take when I saw it.


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## burglar (31 May 2012)

Any thoughts on SYR Syrah Resources, the current "market darling".


Would you enter at around $2.50 expecting it double before year end?
I am not that brave!!


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## burglar (31 May 2012)

tech/a said:


> https://www.aussiestockforums.com/forums/showthread.php?t=4650
> 
> Did a heap on this 6 years ago




hi tech/a, 
Methinks you'll do a heap more in the next 6 years.

Regarding your thread on FCN Falcon Resources ... 
Nice thread! I enjoyed it!


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## pavilion103 (4 June 2012)

I didn't see this one when I started my thread

https://www.aussiestockforums.com/forums/showthread.php?t=24882

Was thinking a lot about SYR too as you can see I used it as an example.


That other thread Tech/a put up looks great. I will digest that in more detail when I am at home.


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## burglar (19 August 2012)

pavilion103 said:


> ...
> Was thinking a lot about SYR too ...




It did look hot at that time!


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## burglar (7 May 2013)

dtraeger said:


> Sure if you can pick it.  ...




I did pick it!

I did not buy them @$0.02




23/12/2009 B 10858 ADN @ $0.26 $2,841.07

I did not sell them @ $0.245
I managed only $0.185

I do not recommend this strategy to anyone.
It is risky ...risky ... risky ...




dtraeger said:


> ... Whats the liquidity like trying to sell at 20 though?




Volume 40,000,000 shares on the day!
Some more the following day.

Includes some churning ... so no problem!

But I do know what you refer to.
I did have a problem of disposal with a trade in MUX.
I still hold some to this day!


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## dtraeger (8 May 2013)

What tool/filter do you use to find potential buys?


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## burglar (8 May 2013)

dtraeger said:


> What tool/filter do you use to find potential buys?




I would trawl through the ASX announcements. 
I was seeking key words in the titles, like Bonanza grade ... eureka ... high grade.
Of course, I often found junior explorers.
I did that for a decade.

I had easy access to stats re companies which had the biggest % increase for the day.
I would try to find the reports that made them fly!

Fraught with danger, I found EXM this way.

I had access to Magazines; _Paydirt_ and the like.
Could still access them if I go to the library.


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## AussieBoy (25 May 2013)

burglar said:


> *I had easy access to stats re companies which had the biggest % increase for the day.
> *I would try to find the reports that made them fly!




Where did you find them from?


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## burglar (25 May 2013)

AussieBoy said:


> Where did you find them from?




My online broker used to have them on the home page, but they have since_ improved?_ the platform.


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## levin123 (27 May 2013)

Hey Burglar, 

Do you have any other tips for picking those baggers? I've been particularly looking at the junior explorers but am finding it difficult to come up with any sort of criteria for choice.


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## Boggo (27 May 2013)

burglar said:


> I would trawl through the ASX announcements.
> I was seeking key words in the titles, like Bonanza grade ... eureka ... high grade.
> Of course, I often found junior explorers.
> I did that for a decade.
> ...




In most cases the real buying has happened before the mug punters come along with the latest report in hand.
The smart money is already in and now have a choice of staying in if the report has long term upside potential or selling out to the report dependant majority who are now buying.

Approaching report time the daily charts are a good barometer of what influence the report may have after it is digested by the masses.
Referring then to the weekly chart can be an indicator of the potential longer term influence.

The report on TGA was accessible to the unwashed masses on the 21st but look what happened from the 9th on the daily chart. Below that is the weekly chart.

Just my 

(click to expand)


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## Boggo (27 May 2013)

Boggo said:


> The smart money is already in and now have a choice of staying in if the report has long term upside potential or *selling out to the report dependant majority who are now buying*.




And an extract from the ann on Fri 24/05 as an example of what I mean. Who do you think they were selling to ?


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## tech/a (27 May 2013)

AussieBoy said:


> Where did you find them from?




http://au.finance.yahoo.com/gainers?e=ax

Personally I look for stocks which have good volume but not ridiculously high volume.
I check the chart to see where the are in the history of the current move.
Over 8c to 80c stocks.

Take a low risk trade (small stop which I try to move the B/E during the day.)

As an Example DYE today


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## burglar (27 May 2013)

tech/a said:


> http://au.finance.yahoo.com/gainers?e=ax



Hi tech/a,

Bookmarked with thanks!!




tech/a said:


> ... As an Example DYE today ...




Will DYE be the next big thing in solar panels?


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## statmech71 (28 May 2013)

tech/a said:


> http://au.finance.yahoo.com/gainers?e=ax
> 
> Personally I look for stocks which have good volume but not ridiculously high volume.
> I check the chart to see where the are in the history of the current move.
> ...




Are you still in this one Tech? How do you treat sharp reversal days with a tall upper shadow? Do you exit at day's end or tomorrow's open, or do you let it take out your stop?

Regards,

Paul


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## tech/a (28 May 2013)

statmech71 said:


> Are you still in this one Tech? How do you treat sharp reversal days with a tall upper shadow? Do you exit at day's end or tomorrow's open, or do you let it take out your stop?
> 
> Regards,
> 
> Paul




Paul
It is an example
I'm not trading it.
I do have a complete method of trading these 
But I'm explaining a pattern method currently
Perhaps later.


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## statmech71 (28 May 2013)

tech/a said:


> Paul
> It is an example
> I'm not trading it.
> I do have a complete method of trading these
> ...




No worries Tech. I'm following with keen interest!


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## AussieBoy (28 May 2013)

Purple XS2 said:


> For a potential multibagger, I try to set a dream scenario before I buy in, a sort of inverse to capital exposed:
> So for example: I put in $1,000 - if it doubles, oh joy -  sell half and be free carried on a stake now worth the original buy-in - get out quick on the first sign of weakness, because that second sell is your profit.
> 
> For bigger stakes, sell a smaller fraction, but sell sooner and settle for a nice profit (say, 33%, on 1/3 original holding?) Again, sell most of the remainder on the first sign of a stall.
> ...




What? You made a 400% one-day gain? Makes my highest one (58%) look miniscule in comparison


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## statmech71 (29 May 2013)

tech/a said:


> Paul
> It is an example
> I'm not trading it.
> I do have a complete method of trading these
> ...




Gees, it's a shame you weren't trading it (or I for that matter!). Gapped up 50% today!!


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## CanOz (29 May 2013)

There are lots of ways to enter strong trending stocks, or forex, or futures for that matter. 

This is one way that Linda Raschke and a few others uses. Its called the "grail" trade. They use this in all time frames too, not just jusr EOD.

You can eyeball charts for this setup, then watch list them for continuation patterns like Tech and Pav do.

Here's what to look for:

A strong burst of momentum - in this case as indicated by a simple 3, 10,16 MACD.

A pullback to the 20 MA after a strong trend (over 30 on the ADX) as indicated by the 14 period ADX.

A continuation pattern, so a triangle or flag, small channel. Somewhere to place a stop limit order and then a stop loss.

I've used PDN as an example as there are not too many exhibiting this on the ASX at the moment....

The first chart shows the momentum, the ADX and the pullback to the 20 SMA. This is when you watch list it and keep an eye out for a pattern to form.

The second chart is the pattern. 

The third is the breakout, the rest is history...multi bagger...As Tech always says though, you have to put yourself in front of that train.

The key here as well is to have a bull trend in the market, buy strong stocks in a strong market. Be patient and wait for the continuation pattern.

CanOz


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## Ann (29 May 2013)

CanOz said:


> I've used PDN as an example as there are not too many exhibiting this on the ASX at the moment....
> 
> CanOz




Have a look at IIN may evolve like PDN did back in 2005.


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## CanOz (29 May 2013)

Here's a US Stock....waiting for a pattern now...


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## CanOz (29 May 2013)

Yeah Ann, IIN had all the right things going for it and then it failed the pattern when the index broke down.

That's one good thing about waiting for the pattern break, even then there would be as money losers as winners likely. Still there are reasonable odds of a multi bagger.

FWIW: Whats important to remember here too is that this is not about indicators, the indicators are showing you that a stock in a strong trend has made a recent momentum high, then pulled back. If the stock still has more left in it, it must prove it by breaking out again.

CanOz


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## Ann (29 May 2013)

CanOz said:


> Yeah Ann, IIN had all the right things going for it and then it failed the pattern when the index broke down.
> 
> That's one good thing about waiting for the pattern break, even then there would be as money losers as winners likely. Still there are reasonable odds of a multi bagger.
> 
> CanOz




Your US stock is $70 odd dollars! It is going to be an expensive multi bagger! I wonder if it will take the DOW with it?


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## CanOz (29 May 2013)

Ann said:


> Your US stock is $70 odd dollars! It is going to be an expensive multi bagger! I wonder if it will take the DOW with it?




Well the US is a little pricey compared to the ASX. I'll see if i can find a few from the R3000. 

Goog and AAPL were $70 at one time too Ann

Here a Bean chart I'm waiting on...

CanOz


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## CanOz (29 May 2013)

Heres one that we can wait for a pullback, then a continuation pattern....by that time we'll likely be in a bear market...


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## burglar (30 October 2013)

Rider said:


> Burglar I'm interested in your experience with sub 10c stocks or small cap stocks in general ( have you dipped your toe into the Shark pond?)




Yes, I swim with the sharks!
I try to look like a cleaner fish?! :

I once read that every portfolio should include a lottery ticket.
When I checked, all mine were lottery tickets.
I had inadvertently "plucked all the flowers and was left with weeds".


I wanted to find that multibagger and invest into a quality investment portfolio.
It is a strategy which I maintain to this day!
So far it is spectacularly unsuccessful!


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