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I have some shares of stock.

Back when I bought them, I paid $26.28 for them. They now go for $89.37. Conveniently, the stock pays no dividends.

So is this a 2.4 bagger or a 3.4 bagger? I.e., what is the definition of a bag? I tend to favor calling it a 2.4 bagger, and if it was $26.28 today, it is a 0 bagger, not a 1 bagger. Is this what people agree on?
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I would say you have a 3.4 bagger. The stock is up 3.4x. That's not your profit, as you imply.

What's the stock?

When I was a junior in college, I put my then net worth into Boston Beer Group around $9-10. It's $150. I'd call it a 15 bagger. And I'm on the hunt every day for another. Too bad I sold when it doubled.

Less than 2 years ago I put 50% of my then net worth into MSG at $22. It's now $60. I sold when it was up a relatively small amount in a few weeks. That's a 2.66 bagger.

There's been a trend here.

I haven't sold any BRK as I expect IV is arguably $200,000/A and growing.
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Lynch used it because of the baseball reference where a "double" is a 2-bagger. I'd personally use it as a multiple of the original price. So a 10 bagger goes from $10 to $100, rather than always having to subtract the original price. I don't think there is a "1 bagger" and a 0 bagger means you're out.

Then again I don't think I use the term "bagger" except for a 10 bagger, let alone put in the decimal points.
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Lynch used it because of the baseball reference where a "double" is a
2-bagger. I'd personally use it as a multiple of the original price.
So a 10 bagger goes from $10 to $100, rather than always having to
subtract the original price. I don't think there is a "1 bagger"


This has been my understanding of this amusingly small issue.
Besides, I always figure if you've made that much money whether it's 9x or 10x shouldn't bother you unduly.

Jim
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I would say you have a 3.4 bagger. The stock is up 3.4x. That's not your profit, as you imply.

What's the stock?


I would not really deal in bags. I would say it is up to 3.4x its initial price

GWR. It took more than a year to go up that much, though.

I haven't sold any BRK as I expect IV is arguably $200,000/A and growing.

I sold a few shares of BRK.B when I needed some cash to take an RMD, and that was needed to pay the tax on that. Not lately. I paid $32,600 per share for my BRK.A quite a while ago. Now a 5 bagger according to this definition of bags. Their price is a lot more now, but from some time in 1996 (I think it was) until now, the IRR is not as fantastic as it once was. If all goes well, I will never sell it, even if it makes sense to do it at some point. Well, I guess I would if Mr. Buffett seemed to be going senile and the board was too chicken to take away the keys.

So if I paid $26.28 for that GWR, and it was $13.14 now, it would be a half-bagger, not a -0.5 bagger, right? It would go negative only if I sold short and got squoze out, whereby I could lose more than my initial investment?
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The amount you invest in a company is the "bag" you start with. If it doubles, you have a two bagger, if it triples you have a three bagger, and so on. Of course success or failure depends on how long it takes the bags to multiply. A two bagger over ten years is only a mediocre equity return while it would be a home run if achieved in a year or two.
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So if I paid $26.28 for that GWR, and it was $13.14 now, it would be a half-bagger, not a -0.5 bagger, right? It would go negative only if I sold short and got squoze out, whereby I could lose more than my initial investment?

Right, that would be trading money for agony, or in your example, losing money accompanied by more agony.
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Lynch used it because of the baseball reference where a "double" is a
2-bagger. I'd personally use it as a multiple of the original price.


If baseball is the analogy, then a 10 bagger would have to be up 11 times the original price. Why? Well, if a double is a 2-bagger, then a single would be a 1-bagger, which is still better than nothing. Get enough singles, and you will still win the game. Whereas if having your stock start at $25 and stay at $25, you can't really call that a 1-bagger - you'll never win the game that way.

In mathematics, this is a common problem, the question of whether you include the starting point or not. In medicine, day 3 of a hospital stay means you've been there 2 days, although some places use day zero to make things more confusing. Even in theology, 'the third day, he rose again' means that Jesus was only dead for 2 days, not 3.

But I agree that a 10-bagger usually means your $25 share went to $250. To change analogies, you started with one bag of gold, and now you have 10 bags. Or in the case of Tesla, I started by owing one bag, and now I owe 2. I propose that this be called a 2-beggar.

Regards, DTM
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I have some shares of stock.

Back when I bought them, I paid $26.28 for them. They now go for $89.37. Conveniently, the stock pays no dividends.

So is this a 2.4 bagger or a 3.4 bagger? I.e., what is the definition of a bag? I tend to favor calling it a 2.4 bagger, and if it was $26.28 today, it is a 0 bagger, not a 1 bagger. Is this what people agree on?


If you bet $26.28 and collect $89.37, your profit is $63.09, Odds are defined as the ratio of what you win to what you bet. In this case it would be 63.09/26.28 = 2.40068. What you call a 2.4 bagger is really the odds, 2.4 to 1.

jkm929
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One Up on Wall Street:
How to use what you already know to make money in the market
By Peter Lynch and John Rothschild
Philadelphia, PA: Running Press
1989
Pg. 17:
That’s where the tenbaggers (a Wall Street parlance meaning that your stock made ten times the money invested) come from, beyond the boundaries of accepted Wall Street cogitation.



If this is correct, then you have a 2.4 bagger, not a 3.4 bagger, since the numerator is how much you made, not how much you now have. For a $20 stock, to make $20 the amount invested (a tenbagger), your share would have to be worth $220.

DTM
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In medicine, day 3 of a hospital stay means you've been there 2 days,

Yes, but they will bill you for three days; If you get there after dinner and leave before breakfast, they bill you two days even though you were there less than 24 hours.

I was in the hospital for three hospital days and got billed for three days in the ICU @ $17,000 day. The irony was that I was not even in the ICU at any time. Nowhere near. The ICU is on the second floor near second avenue, and I was on the 6th floor near third avenue. I know that hospital. Friends of mine work there.

I pointed this out to my insurance company and they said they would straighten it out. They sure did. They waited three months and paid $51,000 for services not rendered.

An then they bitch about insurance fraud.
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"Home plate" and "three bags" are all that exist. A "home run" is a four bagger." Beyond "four bags" we should be speaking of "runs" as multiples of four.

Tim
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"Home plate" and "three bags" are all that exist. A "home run" is a four bagger." Beyond "four bags" we should be speaking of "runs" as multiples of four.

Tim


***************************************

Peter Lynch would often refer to "10-baggers", sounds better than a "2.5 runner."

Joe
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Hey all !

OK ... we're talking a "container" here. Be it a bag, a box, a tank, a pot, a pocket, a cup or even a bowl. It's a place for money ... like "in your mattress". I just hope the market doesn't tank and we all get "sacked".

And now back to your regular scheduled programming.

Rich (haywool)
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