True compounders offer plenty of time to buy
The guest argued that investors do not need to rush into hot IPOs or early-stage growth companies out of FOMO, because true long-term winners provide multiple opportunities to buy in at reasonable valuations.
The argument
Drawing from his '100 Baggers' study, Mayer explained that even the greatest performing stocks experience massive drawdowns and periods of multiple compression, meaning waiting for financial validation of a business model rarely hurts long-term returns.
The thesis, stress-tested
✓ What validates it
- ✓Historical data showing the frequency of 50%+ drawdowns in eventual 100-baggers
- ✓Airbnb's post-IPO performance where the business grew but the stock multiple compressed
▸ Risks discussed
- ▸Extremely rare 'rocket ship' stocks may never experience a significant pullback, leaving patient investors behind
Hear it yourself
"You know, this is like that, and it helps us understand it. X company is kinda like y, and then you, you know, but you have to be very careful about that. What about just the laddered thinking that happens here when we have? And I'll pick on AI in particular as one of these terms. It feels like AI means something different to SpaceX, than it means to Google, than it means to IBM. Yeah. So we see we see that variable inserted at all these places. Yeah. What does it mean? I mean, it confirm you know, people say AI, and they don't they're talking about large language models."
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