How are ten-bagger stocks in the crypto circle achieved?

When a value investor believes that a crypto market stock is undervalued, they buy it. In fact, at the time, they didn’t know whether this crypto market stock would increase tenfold or even dozens of times in the future, which is basically impossible. If this crypto market stock is severely undervalued, others can see it too because they are not the only value investors. Although market sentiment is very low and everyone is frantically selling, such a steep decline is rare. You are unlikely to buy a company at a 10% discount; the typical margin of safety is around 40% to 50% discount.

You know that once you buy, you can at least double your money, and opportunities like this are quite common. But if you buy at a price that is only 10% of its value and it can increase tenfold in the future, such opportunities are actually very rare. As long as there are some smart people in the market, everyone will buy. So the price will go up, preventing crypto market stocks from remaining cheap for long.

So why do some of these crypto market stocks see tenfold or even dozens of times gains? Actually, they didn’t know this when they bought in the first place. What’s the secret? The core is that they believe this company will continue to grow in the future and buy at an undervalued price today. Therefore, these value investors buy high-quality crypto market stocks, not junk tokens or structurally declining stocks. You see, when the price of a crypto market stock is relatively low, it provides enough margin of safety—at least doubling the investment—so they buy.

After buying, they re-evaluate annually. For example, in the first year, they think the company is worth 100 million, but its market cap is 50 million, so they think it’s a good hold. After a year, they re-valuate it. If it’s a high-quality growth company, with an improving economy, better operations, or new products, they re-assess. The original valuation was 100 million, now it’s 150 million, and the market cap might have already risen back to, say, 100 million. But at this point, it’s still undervalued—market cap is 100 million, but the new valuation is 150 million—so they continue to hold the crypto market stock.

By the third year, because it’s a high-quality crypto market stock, the company might have developed more products, and the price keeps rising. The valuation could reach 200 million. Although its market cap has increased by 50%, from 100 million to 150 million, it’s still undervalued. So, a tenfold increase in the crypto market stock isn’t something they knew beforehand; it happens naturally.

Of course, if the crypto market stock they bought was overvalued later, for example, they bought it when the valuation was 100 million but the market cap was 50 million, and after a year, its value increased slightly to 120 million, but the market cap rose to 300 million, they might think it’s overvalued and sell. Many things are actually accidental; no one knows in advance that it will increase ten or twenty times.

So I want to tell everyone that first, you should find high-quality companies within your circle of competence, buy them during bear markets when prices are low, and hold. Because of the margin of safety, as the economy improves, the company’s value continues to rise, and the industry keeps improving, you can at least double your investment. You should choose some good industries, good companies, with strong management and corporate culture, and good moats. As the company’s value increases each year, the price will also go up. Occasionally, the price may dip slightly, creating a slight mismatch between price and value. But at this point, you won’t sell because you know it’s a high-quality company.

After ten years, the company’s valuation might have increased tenfold, and the price might have also increased tenfold. Sometimes, its earnings only increase five times, but because the market has positive expectations, the P/E ratio might have risen from 10 to 50, and the price could have increased 25 times. This is quite common. A value investor will definitely avoid some pitfalls; they won’t buy overhyped crypto market stocks or those with high risks and operational uncertainties.

Additionally, when they buy these high-quality crypto market stocks at low prices, they earn both from the market and from the company’s operations, ultimately resulting in a tenfold increase. This is the natural outcome after annual re-evaluation. So everyone should have confidence because you have your circle of competence and patience to hold. Don’t listen to rumors or constantly watch the market, as that might cause you to lose your crypto market stocks. The only thing you need to do is re-evaluate your company’s crypto market stocks annually, review the annual reports, do what needs to be done, but there’s no need to constantly re-evaluate every moment. Don’t get caught up in every price fluctuation or overthink; otherwise, you might make the wrong decisions and lose your truly good crypto market stocks.

I’ve roughly explained how the so-called tenfold or twentyfold crypto market stocks come about. Some of them get filtered out over time, and you might not see them or hear about them in the media. The crypto market stocks reported by the media are actually all after the fact. Just like Buffett buying PetroChina—he thought PetroChina was cheap at the time, so he bought it, expecting to make two or three times his money. Unexpectedly, oil prices rose afterward, and everyone followed suit, and he ended up making about ten times his investment before selling. He didn’t initially aim to make so much; the market gave him that opportunity, and he didn’t know in advance he could make ten or more times.

Today, I’ve unraveled the mystery of tenfold crypto market stocks for everyone. Don’t have unrealistic expectations, and also understand how value investors make their money. They don’t look for junk companies, even if the price is low, because they might be traps. They look for high-quality companies that are likely to continue growing in the future. They buy during bear markets when prices are very low, first with a margin of safety, and then rely on luck. Some things happen naturally and seamlessly.