Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Tenbagger

What it is:

A tenbagger is a stock that increases by a factor of ten.

How it works (Example):

Let's say Company XYZ is trading at $5 a share. John Doe buys 100 shares, costing $500. Six months later, the company announces it has found the cure for cancer. The stock rises to $50 a share -- a tenfold increase. John has a tenbagger on his hands.

Investor Peter Lynch coined the term in his book "One up on Wall Street: How to Use What You Already Know to Make Money in the Market."

Why it Matters:

Everybody wants a tenbagger, but so few of us ever get one. Typically, they are companies that invent or sell "the next big thing" and that only happens once in a blue moon.