10 Bagger Club Annual Report 2020 and Forecast for 2021
Background To Our Club
The 10 Bagger Club, our financial information sharing club, originally started amongst a group of retired financiers, brokers and fund managers, mainly living on Phuket, sharing stock and deal info via a WhatsApp group.
We knew that we were outperforming most other funds, research groups and stock picking sites, so in March 2020 we decided to formalise the club and try to grow it bigger. This was primarily because we believe that more eyes and ears working together in the markets should bring us all better stock choices to pick from.
In December we closed our WhatsApp chat group to out-messages only, and moved our chat line to the better app discord. We are also building up the website step by step.
By year-end 2020 our group has expanded to 220 global members. Our intention is to grow our membership significantly more over the coming year.
Last Year’s Investment Activities
Last year was an amazing year for investments. One of the best we’ve ever seen. In just our first 10 months, the average gain after we picked them amongst our 13 official 10-bagger stock picks in 2020 was an astounding 2,004%.
However, the above figure is rather flattering, as it shows the average rise in the stock prices (SP) of all our official 10 bagger picks from the price we first called them out until their highest point after that call. Not all members get in at the bottom and, of course, it’s extremely unusual for members (or any investors) to ever manage to exit right at the top. Nevertheless just catching part of these extraordinary moves last year meant many of our club members still made significant gains in their investment portfolios in 2020, some by life-changing amounts of over 1,000%.
We elect to record our 10 bagger calls as explained above, not to try to look smarter, but because each individual member chooses when to buy in and sell out of our 10 bagger calls (if at all). So after our calls, the above figures show the profitability range they had/have to take advantage of. Unfortunately, many of our later joining members did not have the opportunity to buy into the stock picks we made earlier in March /April 2020 during the very opportune Covid induced market crash, and these stocks, starting from lower bases, performed the best last year.
However, we also have full confidence in our more recent 10 bagger calls too. But members may need some patience. Many undervalued or promising stocks can sit undervalued for quite some time. Then suddenly (and often unexpectedly) they just take off north, usually after some announcement or sometimes simply because the market suddenly notices them. When they start moving, that attracts more attention and volume, more people then realise how undervalued or promising they are and the virtuous cycle begins. But always bear in mind the most important part of any gains are those made earlier on, as thereafter your percentage profits compound faster. So, as the surfers say, to catch the good waves you have to be waiting in the ocean.
Some of the stock prices of our 10 baggers have since fallen back from their post high calls that we record, while others continue to make new highs. Probably the most important thing for us in 2020 is that none of our picks actually fell in price. Losing money is, of course, an occupational hazard for those picking speculative 10 baggers, and it’s something, unfortunately, we all have to be prepared to accept from time to time.
To be honest, last year probably made us seem more clever than we are. That’s because finding potential 10 baggers was easier than usual. The sudden Covid-crash in March smashed down most stock prices very low. This induced global governments to quickly respond by throwing far more money at the problem than was actually lost due to the pandemic. This soon caused those same stocks to rapidly rebound back up to their old highs, or higher. This unusual action made 2020 one of the best years for catching 10 baggers that many of us have ever experienced in over 35 years in this game.
For example, we estimate that just on the ASX alone, our main target market, over 40 stocks more than 10 bagged last year. Almost one a week. We missed most, but with several sets of trained eyes and ears in the market we were at least able to pick six official 10 baggers last year, plus a few more unofficial ones as well as members picking a plethora of other multi-baggers.
A Summary of Our 2020 “Official” 10 Bagger Calls
De Grey Mining (DEG.AX) called March +3,100%
In early March 2020 one founder member, already in DEG, convinced us to make our first 10 bagger call on DEG at 5 cents after he saw the positive results of the drilling on their Hemi/Mallina gold sites in West Australia. DEG rallied quickly towards 20 cents. We actually advised members to sell very prematurely after the stock seemed to peaked at AU$1.06 in July and retrace. But it later recovered to push up to a high of AU$1.60 in September. So although we missed a good chunk of the rally, several members made profits of over 400% 2021 prediction: Sell - there are better opportunities elsewhere.
Chalice Mining Ltd (CHN.AX) called March +2,014%
One member already invested in CHN alerted us to the very high-grade Nickel copper PGE intersections at their Julimar project in WA. We called it as a potential 10bagger at 23 cents in late March and the share price has just gone from strength to strength since as Julimar, and CHN management, have continued to deliver, and the price of nickel and PGE continue to strengthen. In September after CHN had 10 bagged at AU$2.30 we suggested members sell and take a free ride (as in sell enough to get their original investment, or more, back). The Share price (SP) is now a whopping AU$4.35 and continues to ride higher on the back of the PGE and base metals rally. 2021 prediction: Hold your freeride shares.
Afterpay (APT.AX) called March +1,022%
Many members were already holding this market darling since 2019. It is the leading company in the fast-growing buy-now-pay later (BNPL) space being led globally by Australian companies. When the Covid-crash hit, APT fell from AU$40 down to AU$7. We felt this was way overdone as we believed APT was likely to do even better than before with the expected increase in lockdown-induced online shopping. When we were confident APT was indeed turning back north from its AU$7 lows we called it at AU$11 as a potential 10bagger in late March. APT’s SP subsequently far outperformed even our bullish expectations in the ensuing rally of all the BNPL stocks last year. When APT hit AU$100 in November, and with a ridiculously high PE ratio, we recommended members sell at least enough to free ride in this robust and growing company. APT closed 2020 at AU$ 118 for a 10 bagger. 2021 prediction: Hold your freeride position or sell to play in new deals as we now see some coming risk to APT’s future growth from the rapidly growing DeFi markets.
Wide Open Agriculture (WOA.AX and WOAO option) called March WOA +1,750% and WOAO +12,000%
One of our members had been a shareholder in WOA since pre-IPO and loved their range of organic and natural foods. In February WOA added a home delivery service which pushed up revenues 46% just that month. As the world locked down in March, and home deliveries boomed, we called WOA as another potential 10 bagger. As we saw the potential in the stock we of course also called WOAO, its separately listed, more highly-geared, June 2021 options which cost only 1 cent. In April WOA announced a whopping 600% increase on month-on-month sales, and the rally started. Then during the year they also pushed out an oat milk product “OatUP” and an exciting lupin based protein which allowed the stock to spike up to AU$1.85 in mid-August and the WOAO options to spike an astounding 12,000% to AU$1.20. We missed that spike top and decided to recommend exiting the stock and option much lower in September after WOA seemed to find range support around AU$1. 2021 prediction: Hold
Bitcoin (BTC) called March +435%
When Bitcoin fell to below US$4,000 in the March crash our outspoken Norwegian BTC-hodling market trader based here on Phuket, convinced us over a golf game to add BTC to our 10 Bagger calls. With Millions invested in BTC He was, (and still is), adamant that BTC would hit US$60,000 before the end of 2021. So we called it as a 10 bagger at US$5,465 in March as the BTC price also recovered from its Covid-crash lows. The rest is history. 2021 Prediction: Strong Buy. Despite seeing 500% gains last year, the stock to flow model convinces us BTC can reach over US$100,000 within 12-18 months, as far more institutional money will chase less and less supply of BTC.
Element 25 (E25.AX) called April +1,396%
Some members have owned shares in E25 for years as they felt that its huge manganese resource in west Australia was extremely undervalued by the market. They liked its size, high purity and that the huge resource sits right at the surface meaning low CAPEX to start the mine. Most of all they liked the thrifty and hardworking management, the opposite of the “lifestyle directors” who blight so many of the ASX small caps. So when E25 fell below 10 cents in the crash we very confidently called it as a 10 bagger.
E25 is now building the mine fully funded, with no debt and only 132 million shares on issue. It should be in production Q2 2021 and making around AU$35 million per year thereafter and soon building up to AU$70 million PA in a year or so as they ramp up production for the next 40 years. These numbers are also just based on the fact that manganese (Mn) is used mainly for strengthening steel. But rarer high-purity maganese, which E25 has, is badly needed for the booming battery market and sells for almost 10 times more, but needs more capex to produce. This increasing demand for high purity maganese makes us believe that E25 must now be a prime target for a buyout or JV with a big Asian battery maker. We believe that one of the big battery makers are likely to agree to invest the AU$300 mill or so capital required to build a battery-grade Mn purification plant onsite in return for steady, a long-life, high-purity Mn supply from a reliable jurisdiction like Australia. If this happens, and we believe it is likely, and sooner rather than later, E25, which already 10 bagged last year, could maybe 10 bag again from here. 2021 Prediction: Strong Buy. It is our biggest and strongest conviction holding.
Boab Metals (BML.AX) called April + 875%
Boab Metals (BML.AX) Called April + 875% BML recently changed its name from Pacifico Minerals (PMY) and had a 25 for 1 share consolidation. BML owns a huge lead, zinc and silver resource at defined PFS (pre-feasibility) stage in west Australia which looks very economic to mine. We think this is the ASX’s most undervalued silver play. We called it a potential ten-bagger last April in expectation of a big rise in the silver price. The silver price did move up, and so did the BML’s SP by over 600%. We expect the silver price to move higher again in 2021 as more USD are printed as stimulus and still suggest this stock as a buy or a good hold. 2021 prediction: Buy if you believe silver will rally in 2021, For our members in earlier, hold your free ride shares.
Temple and Webster (TPW.AX) called April + 603%
We discovered TPW from a paid research service. TPW is an Australian leader in online sales of Home furnishing. During the Covid lockdown, we figured many people would be refurbing their homes. We also feel TPW’s cool brand has the ability to expand into other items (like a mini-Amazon) and hopefully allow them to expand overseas into the bigger Asian markets. TPW did have a good year with growth up 74% overall year-on-year, and that growth has been accelerating (for example, 2020 Q4, growth was up 130% YoY). TPW stock rose 600% after we called it in April and we see further growth this year. 2021 Prediction: Early buyers who are free-riding hold your free ride shares, but TPW’s ongoing growth should be less dynamic than last year.
Mandrake Resources (MAN.AX) called April +983%
Following the success of CHN, we decided to call MAN as a potential 10-bagger in April when it was just a tiny AU$$3 mill cap junior. This was because it holds a tenement 30km from CHN’s amazing Julimar property which has exhibited similar properties from early rock sampling and EM surveys. Based on it’s tenements “nearology” and “similarology” to Julimar, we called MAN as a potential 10 bagger thinking this stock could reach an AU$20-40 mill cap pre-drilling based on an expectation of a possible repeat of Julimar. MAN did rise over 900% on exactly that reason. But beware, most drill programs usually turn up dud, so this is a high-risk play which needs money management- as in sell your grubstake into the probable pre-drilling price hike as the company gears up to drill (early Feb this year) then freeride the balance because, if the drill program is a dud, MAN has little else and could fall by over half. But if they hit anything decent, it could easily 10 bag again from here. 2021 Prediction: A very speculative buy. Use our 10 bagger money management techniques.
Meteoric Resources (MEI.AX) called May + 567%
A main reason we called MEI as a 10 bagger in May is the affable Dr Andrew Tunks it’s MD and the strong following he has amongst serious resource investors. MEI was then only an AU$10 mill market cap stock with a decent cash balance, good management and two large proven gold deposits in Brazil which we felt made it cheap. We also expected the gold price to rally which usually rapidly increases the price of such promising junior gold stocks. During the pandemic, management returned to Australia and acquired a new gold project in WA which one of our members knows and felt held good promise. Gold did rally and MEI has risen over 900%. We are now excited due to MEI’s recent discovery of a vast 2x1km EM anomaly discovered underneath their existing gold-copper resource in Brazil. They just raised AU$4 million to drill into this anomaly in Jan/February this year. If it looks likely to be a massive new Gold resource, as we hope, this stock could 30 bag again from here. However unlike MAN above if the results are duds the stock shouldn’t fall back too far as its other existing projects reasonably underpin its lowish market cap. 2021 prediction: A speculative buy, but watch their drill results in Brazil closely.
Enegex (ENX.AX) called August + 650%
This call was/is really just a speculative punt on a clean listed shell co. In August we called it during the gold rally as ENX was just an empty AU$2 mill cap ex-oil exploration co starting to move into gold, it had no debt, some cash, not too many shares and therefore the ability to raise cash. Expecting a gold rally and knowing that such shells frequently rise by 10x in gold bull markets, we took a wild punt and called it as a 10 bagger. The SP rose 600% in the subsequent gold rally. We again suggested members take their original stake out and free ride. Today the company still has only a small AU$8 mill market cap. But it only has AU$ 800,000 cash (so will need to raise again soon) and so far management have done nothing very impressive other than issue themselves more free options. So members have sold out. 2021 prediction: Sell but keep a close eye on this micro-cap, as it has the ability for an explosive price jump again if gold rallies - which we also expect again this year.
King Island Scheelite (KIS.AX + options KISO.AX) Both called October and purchased together +177% combined
KIS has the world’s purest tungsten mine on King Island off Tasmania. With full feasibility done, permits in place and offtake agreements done they are planning to soon reopen the mine. The mine had been running since 1917 but closed in the 1990s when China dumped the world tungsten price. But China (and particularly the west) is now running very low on vital tungsten - and its price is back up and looks like going higher post-Covid. In November the club arranged to help fund the company by taking part of an AU$ 2.5 million private placement from KIS at 5.5 cents with half a free option attached (the listed option is short dated only till July 2021, ex at 10 cents).
With a mere AU$30 mill cap we feel KIS is very undervalued only because the market is not yet clear how they will get the AU$72 mill financing needed to reopen the mine and plant. We, however, are confident they should get government help to do so very soon as it’s a strategic export mineral and good for King Island’s struggling economy- which the government already significantly subsidies. When/if this govt assistance is announced we think the market will then revalue up quite rapidly to reflect that they should soon be making AU$25 mill+ net profit per year and growing. We expect the KIS SP should soon move up to the mid-30s and the options to the mid-20s, giving members who took the placement last November another 10 bagger return. 2021 Prediction: Strong buy: We class both KIS and particularly the more geared KISO options as our only other very strong buy along with E25.
Other 10x Stocks We Invested In But Never Called As 10 Baggers
In addition to the “official” 10 baggers above we pre-called, members invested in several other 10 baggers which we, the club committee never officially called and recorded as potential 10 baggers. They were:
Gold Mountain option (GMNOB.AX) which was our fastest 10 bagger moving from 0.01 cent to 1.2 cents in just 4 months in the mid year gold rally. This option was very thinly traded plus we don’t trust the management, so we never officially called it as a 10 bagger.
Openpay (OPY.AX) is another of the BNPL group shares which, like APT, we played in during their strong rally mid-year. It ran up 1,457% from 32 cents in March to nearly $5 in July. As we had already called our preferred APT (above) as an official 10 bagger in the BNPL sector, we did not call both, but several members played in it.
Celsius Resources (CLA.AX) Many members have been buying CLA all year, from its lows of 0.06 cents (when we knew a big shareholder was being forcibly sold-out by a bankruptcy court). Today CLA sits at 5 cents up 700% from its low after obtaining some large copper-gold projects in the Philippines. We could not see this coming beforehand so never called it. We now expect CLA to climb significantly higher again in 2021 based on its new Philippine assets, the rising price of copper and its large cobalt/copper resource in Namibia.
Tesoro Resources (TSO.AX) several members also invested and profited well in this Chilean copper explorer which spectacularly rose almost 3,000% from under 2 cents in March to 50 cents in October. We missed the first part of its move and never expected such a big rise or such a strong copper rally last year and so we never called it as an expected 10 bagger.
In addition, members called out and other members invested in several other multi-baggers both in Australia and overseas. Multi-baggers are stocks that members think will go up over 100%, but probably less than 1,000% (a ten bagger):
In Australia these stocks included:
All the BNPL (Buy Now Pay Later) stocks: rallied 5-700% between March and August. These included SPT/QFE/SZL/OPY/APT. Members invested in many of them, it was like shooting fish in a barrel. The BNPLs have fallen back since their July highs, but all remain significantly up for the year by around 200 - 300%.
Proteomics Intl Labs (PIQ): at the forefront of predictive diagnosis, was called in May by one of our medical members at 31 cents and had a solid rise to close the year at 79 cents
Novonix (NVX): This supplier of modern battery materials and tech developer has one of the most impressive boards of directors of any junior ASX co. Plus a rumoured link with Tesla. We bought it around 25-35 cents. It ran up almost 700% to $2.00 four months later. it fell back a bit, many are free riding as NVR could easily break higher in 2021.
Silver Mine Option (SVLOB): ex Sept 2021. We called it in April at 4 cents in anticipation of the coming silver rally. It ran up to 20 cents and has now settled around 15 cents.
Euro Manganese (EMN): Our manganese bull member, along with E25, suggested members buy EMN in September at 9 cents, it subsequently rose over 350% to 40 cents by December and is on another tear this year.
Uranium stocks: In September some members started taking positions in Deep Yellow (DYL) and Bannerman Resources (BMN) both of which rose almost 200% in a year end rally. We expect this uranium rally to continue in 2021.
In Canada and the US these included:
Fortuna Silver Mines (FSM.NYSE) Silver developer up 265% after May call
Discovery Metals (DSV.V) A silver explorer up 730% after April call
Nova Royalties (NOVR.V) A base metals royalty company up 200% after October call.
New Found Gold (NFG.V) A gold explorer up 245% after August call.
Metalla Royalty (MTA.NYSE) A gold royalties company, up over 100% after June call
Tesla (TSLA.NAS) Elon’s baby, up 280% from June call
Square (SQ.NYSE) Mobile payments pioneer up 375% since May call
Silvergate Capital Corp (SI.NYSE) A crypto bank, up 220% since November call
Microstrategy (MSTR.NYSE) Data and Bitcoin player, up 120% since November call
High Yield and Growth Stocks
Some members also look for high dividend stocks to invest the balance of their portfolio, or their 10 bagging profits in. In 2020 members identified the following high yield stocks:
Xero (XRO.AX) this accounting platform has a low yield but we believe it to be one of the best steady longer-term growth stocks on the ASX . It rose by 80% last year.
Fortescue Metals (FMG.AX) Iron ore producer whose SP rose 109% plus it paid out over 11% in dividends in 2020.
Cromwell Property Group (CMW.AX) Its SP having fallen, this property company pays 8.8% divy.
Members also are also investing in the following international high yielders:
Prospect Capital Corp (PSEC.NYSE) an investment fund (yield 13.5%) and pays monthly.
Energy giants BP and EXXON both yielded 7.7% last year.
For more aggressive dividend seekers, members identified:
Eagle Hospitality (EAGL.SGX) Singapore based REIT paying 25% annually
Total Gabon (EC.PA) Listed in Paris, this big French/Gabonese oil company paid a 34% divy last year.
Our Last Deal of 2020
Bryah Resources (BYH.AX + BYHO option) Bought December +20% The club’s last main deal of the year was in mid-December when members clubbed together to take an AU$ 1.3 million private placement in resource explorer BYH at a discounted price of 6 cents. We also got half a free attaching option to buy more shares at 9 cents before 2023.
Whilst we are not expecting BYH to become another 10 bagger, it is a de-risked and undervalued investment in our opinion. When we bought it for 6 cents BYH only had a tiny AU$ 8 million market cap. But it was holding AU$ 3.5 million cash, had a sale offer of AU$ 5 million for its W.A. manganese property, plus it held a proven resource of 42,000 oz of surface gold in one property, and with a JV processing agreement for it with a neighbouring plant which is worth around AU$ 10 million more cash.
We estimate this strong cash balance, in effect, makes its most promising main business free. That is developing Windallah, a large tenement in W.A, with known gold-copper content. More interestingly, big Sandfire Resources (SFR) has a processing plant nearby that should soon run out of ore, and is desperately looking to JV with anyone to develop a gold deposit nearby. If this pans out for BYH, it could well become another 10 bagger. If it doesn’t we are confident BYH shouldn’t fall much as it has decent management and remains well-funded to undertake other promising projects. 2021 prediction: Buy, it has low downside risk and strong potential upside.
10 Baggers in 2021 - The Prospects
The tsunami of government stimulus money globally looks set to continue in 2021, which shall provide liquidity and accelerate the consequent debasement of fiat currencies. Also, the ongoing lifestyle changes thrust upon the world by the pandemic, or the return to normalcy post vaccinations leaves us confident that 2021 should be disruptive enough to business to offer us more new winning stocks and another good year for finding potential 10 baggers – particularly in the tech, genomics, commodities and crypto sectors.
We, of course, remain wary of a new potential crash, which could hit at any point this year if the exuberant sugar-rush of the free money wears off. Therefore in 2021, we advise members to not be too greedy and to always keep some powder dry, so peel off winnings a bit earlier than you want, to retain a cash balance for new opportunities, or to take advantage of another crash in markets or cryptos.
We have already started 2021 with two more official 10 bagger calls in early January one was Etherium, ETH, and the other is DYLO.AX the listed options on Australian uranium development company Deep Yellow Ltd, which are both already up 70% and 100% respectively in just the first two weeks of January. To find out more on what we expect from them you need to become a club member.
Members have also made three other winning multibagger calls in the first two weeks of 2021. Biotech Antisense Therapeutics (ANP.AX), Mineral Explorer Anson Resources (ASN.AX). and Strategic Elements (SOR.AX) a mining tech co. All three are up almost 100% already.
Our more knowledgeable crypto members have also called three smaller altcoins also as multibaggers and probable 10 baggers this year.
The club is currently lining up some excellent cheap private placements for members two of which we strongly believe can become 10 baggers in 2021. Again, to be able to participate in them early, you need to become a club member.
Technically this year we plan to improve the club’s website, expand the clubs reach onto Twitter, and also to start recording video interviews with the management of the companies we are investing in or considering investing in so our members can get to know them and understand them better. This way they can either feel more comfortable holding them or decide to sell out.
Finally, a short note about our newly introduced US$100 annual membership fee we instituted this year. Here’s why we have done so.
There is a cost for running the club, so far covered by the founders. The club committee feels that as all members benefit equally from this club, like any other club, all members should support the club equally. Also if we get more fees it means we can provide better services to members such as funding more research etc.
A membership fee also serves as a doorway against riff-raff and trolls. Paying to join ensures members are more respectful of the club.Now that we are opening up the club to the public, if it remains free there’s a high chance we will just get clowns joining who will clog up our discussion channels with crap. This will demean the club and scare off our more professional members.
Also frankly, if someone won’t pay our introductory price of USD100 (a trade commission or a couple of rounds of drinks) for the opportunity to get several chances a year to ten times, or even double their money, plus to make connections with other smart traders, then they are probably unsuitable members for our club anyway.
We hope all members understand the committee’s viewpoint.
We wish you all a prosperous 2021. After many years in this game, we can say with assurance the markets are very good right now for 10 bagging. And that is not always the case. So to any potential new members out there, considering whether to join, we welcome you and let’s all try to make hay while the sun shines, and have some fun doing so.
The 10 Bagger Club Committee, January 2021.