Over the past 3 years, I've spent hundreds of hours trying to reverse engineer the attributes of companies that can 100x your money.

Here are 7 critical characteristics to look for on your hunt

Intention To Get One

Most people spend time searching for them but are unable to withstand the peaks and valleys of long-term ownership

Focus on fundamentals, not the stock price.

Holding companies as they compound will allow you to get closer to 100-bagger territory!

Quality Growth

Too many investors focus on revenue growth that doesn't translate to earnings or free cash flow growth.

Instead, focus on finding companies growing earnings/free cash flows at sustainably high rates.

Reinvestment opportunity

If you focus on dividends, you can succeed, but finding a 100-bagger will be unlikely.

Instead, you want a company that can reinvest earnings back into the company at high rates of return.

Hold onto a business that can do this, and relish the results.

High ROE

Finding businesses that have one-off high ROEs isn't difficult to find.

Maintaining a high number is more important than 1-time increases.

This ensures that returns continue to compound rather than decelerate.

Decelerating returns are the kryptonite of 100-baggers.

Great Management

Too much analysis briefly covers management history.

Instead, find out what management is doing to boost the company's operations.

Great management + great business = the holy grail of investing according to Charlie Munger.

Culture

Learning company culture is one of the hardest parts of analysis, so most investors skip it.

Instead, look at the following to identify a kick-ass culture:

• High insider ownership

• Great relationships

• Long employment tenure

All these points to a winning culture

Incentives

Companies incentivized to focus on the short term are not your friend.

They sacrifice the long term for short-term.

100-baggers require the opposite approach: sacrifice the short-term for long-term fundamentals.

A 100-bagger should never sacrifice the long-term.