How to Find a 10x Investment

This is from a video on youtube channel called Dave Lee on Investing. I like a lot of David Lee’s philosophy on investing. This video is titled How to Find a 10x Investment: Peloton in 2020 (Ep.43) and explains how David Lee estimates what a company might be worth 3 or 4 or 5 years down the line. It is a exercise in how to value potential 10X multi-baggers.

Two of the companies that David Lee has analyzed and liked in the past are Tesla and Square.

Where David Lee differs from many people with investing platforms is he is not too big on simply pumping out a list of picks. David Lee is more about teaching investing skills which he mentions in the early part of this video.

David Lee also gives his three types of 10X companies:

  1. The Generational company - easy to monitor but hard to find. Sometimes, it takes years to find such companies. David Lee believes Tesla is a generational company.

  2. Great company - difficult to monitor

  3. Purely speculative

In this video, he profiles Peloton, which by the way he does not believe is a 10X stock over the next 5 to 10 years. I believe he estimates it to be something like a 3 or 4 bagger if none of the risks in Peloton manifests.

This is a valuation exercise. Take what you agree with and leave the rest (Video 28:36 Min):