$10K in Netflix is now worth $1,750,000 since 2009
A 175 baggers, the dream of every investor buying individual stocks.
This post isn't about Netflix specifically nor how to find the next Netflix.
This post is about knowing if your process and if your investing rules would have led you to hold onto NFLX from $10K to $1.8M.
Let's see...
Netflix started streaming in January 2009 and the share price (adjusted to split) was $0.50.
Let say you bought for $10,000 of it.
Then after one year, it already be up +100% and your $10,000 would now be worth $20,000.
It would have been tempting to sell or just sell half to then play with house money, right? We see this pattern all the time...
Well then you just sold $900,000 of that $1.8M today.
2 years in, share price is up to $4.00 for a whooping 8-baggers!
$10K is now worth $80K! You see everyone around taking profits, locking in gains or sell because it's now obviously overvalued.
Let's say you stayed strong and held every share because you let your runners run.
Well then the stock plunged back down -80% to $0.70. Your $80,000 is now worth $14,000 and everyone is bragging that they knew and "told you so" making you feel like an idiot to not have sold.
Would you still hold?
It took 2 more years to get back to $4 and to see your position back to $80,000...
Would you then have been tempted to lock in some profit this time? After having missed the previous 8 baggers...
Just think about the moves you made in the last 2-3 years, especially the selling and trimming. How would you have behaved during that 4 years after holding NFLX
Fast forward a decade after Covid and 2021 stock market frenzy brings that $10,000 to a value of $1,400,000 !
Still holding ?
Well 2022 wasn't kind and you see your position go down -70% to $400,000.
You lost $1,000,000 !!
How would you react to this?
It then got better and mid-2025 your position is now worth $2,680,000 !
Only to fall again -35% in the last 6 months to its current value of $1.75M... you lost $1M again !!
All that to say that many says they are in for the long run, but realistically how many would have held during all these quick movements up when it's tempting to trim and after losing -80% multiple times, including losing $1M twice!
If you want to hold to 100+ baggers you will need to go thru all of this. No stock ever went 100-bagger with a constant +17% CAGR every year. It's way more bumpy than you can imagine.
You need to think about this now and set up your rules to allow you to keep holding onto your winners. You need a plan, because if you have to make decisions about your holdings every week or month, you multiply the occasions of making bad decisions.
Will your process and strategy allow you to hold during that whole ride?
