The 100 Baggers Club

Over the past decade and half, 25 listed companies have gained 100x or more in value in the U.S. and Europe. The top performer was XPEL, a Texas-based firm that specializes in automotive surface protection and window tint solutions. XPEL, founded in 1997, has returned 1,182x (i.e., a $100 investment would have grown to $118, 200!). Number two was Patrick Industries, the Indiana-based supplier of parts for RVs and mobile homes, returned 654x. Both XPEL and PATK are relatively tiny companies with market capitalizations of $1.1 billion and $3.0 billion, respectively.   

Source: Thierry from arvy; Syz Group (blog.syzgroup.com). (Note, growth as of April 3, 2024)

Interestingly, this list also includes two of the world’s biggest companies NVIDIA and Netflix. NVIDIA, now the largest company in the world with a market cap of $5.5 trillion, has soared in value by over 31,000%! Fifteen years prior it was still a relatively large ~$18 billion company making this growth all the more remarkable.

                                                                                    

Source: Yahoo Finance and Mantabye. Click to enlarge. 

There are other interesting breakdowns. While most of the firms above are 20-40 years old, the oldest is over 150 years. German biopharma Sartorius was founded way back in 1870 and it's time to be a growth stock finally arrived! Not surprisingly, nearly half of the companies (11) are in tech; four hardware-focused (NVIDIA, Entegris, SMCI, and Besi) and seven software-oriented. Other sectors represented include industrials (5), health care (3), consumer discretionary (3), consumer services (2), and real estate (Sagax). Similarly, more than half (14) are based in the U.S., followed by Europe (9). Finally, based on the most common categorizations of market cap, 23 of these companies were either micro or small-cap companies when their remarkable growth started. Forward 15 years, eight had graduated to mid-cap status, ten to large-cap status, and two (you know who) became mega caps. One, AVIS, also became a meme stock--which certainly has helped its return.

In hindsight, investing in NVIDIA, Netflix, Super Micro, etc. seem pretty obvious. But it's worth remembering there are tens of thousands of publicly traded companies at any given time. Just 25 returned 100x (over the sample period). Good luck finding them! Compare that to the odds hitting the jackpot in private markets. Venture capitalists argue that the most successful companies' growth happen before they go public (which is why you should, naturally, give them your money!). But even VC returns are highly skewed; their 'spray and pray' approach means perhaps only 1 in 40 investments may return a10x, let alone a 100x. So, if you happen to have invested in any one of the above companies in the past 10-15 years, then you've done:
  

A Golden Year

Tomorrow will be first trading day of 2026. So, it's a good time to look back at how different asset classes performed in the past year. 

Equities continued to surge ahead in 2025, once again powered by AI. The S&P 500 and NASDAQ Composite gained 18.7% and 21.1%, respectively continuing a run that began in November 2022 after OpenAI debuted ChatGPT. The two U.S. indices have now cumulatively returned 87.5% and 127.0%, respectively, over the past three years led by the likes of NVIDIA, Alphabet, Microsoft, and Meta. International stocks did even better last year, with the Europe's STOXX 600 Index rising 36.8% and the MSCI Emerging Markets index up 33.4%. Yet, for all the strong showing among equities, 2025 was really gold's year to shine. The yellow metal, long thought of as safe haven asset and inflation-hedge, soared 62.2%--its strongest annual performance in over four decades. Gold's powerful rally was driven by a number of factors, including a weakening dollar, aggressive central bank purchases, persistent inflation concerns, and geopolitical uncertainties. Livestock was another strong performer, as U.S. herd size shrank to its lowest level since 1951. 

On the other hand, oil and the U.S. Dollar weakened substantially in 2025. Oil's slide was primarily due to oversupply in the market after OPEC + increased production; U.S. shale boom and the emergence of new oil sources in Brazil, Guyana and Norway further contributed to the supply gut. The Dollar Index, which measures the greenback against a basket of foreign currencies, was down 9.4% last year largely as a result of President Trump's tariff policies and Fed rate cuts. Lastly, bitcoin stumbled after several years of strong performance...because? Well, who really knows--it's crypto! It was probably the usual mix of leverage and liquidations and perhaps investors' eagerness for gold, rather than crypto, to diversify away from traditional assets. In any case...here's summary of the winners and losers in 2025 (in USD):

Source: Bloomberg. As of December 31, 2025 (click to enlarge)

The asset class returns quilt below also shows how these same strategies performed over the past few years. Equities and crypto have generally been the consistent winners since 2020, but there have been some meaningful rotations into real assets, such as gold, oil, grains and cattle over the years (in USD).

Source: Bloomberg. As of December 31, 2025. (Click to enlarge)

BRIC By BRIC

In 2001, Goldman Sachs economist Jim O'Neill coined the acronym BRICs to represent the four major emerging market nations, Brazil, Russia, India and China, that he predicted would drive global growth and transform the international economic order. (The full report is here.) The idea soon took off, leading to an investment and business charge into the BRICs that catapulted O'Neill from head economist to chairman of GSAM. Two decades on, how have O'Neill's predictions fared?

From an economics perspective, it's been a mixed bag. China has soared to become the second biggest economy in the world. India has climbed, while Brazil and Russia have stagnated after a decade of strong growth, as shown below (GDPs in current USD; click to enlarge). In 2001, Brazil, Russia, India and China were 2.2%, 1.2%, 1.9% and 5.3% of global GDP, respectively. By 2020, Brazil and Russia were still around 2.4% and 2.5% of world GDP, respectively; India had risen to 4.3% of global GDP; but China...had shot up to a remarkable 24.3% of global GDP from $1.3 trillion to $14.7 trillion. Over the past two decades, the world's economy grew from $20.5 trillion to $60.5 trillion and China was responsible for nearly 40% of that increase!  

                                 Source: Bloomberg, World Bank

                                         Source: World Bank, Mantabye

                                            Source: Mantabye 

But what has been the result from investors' perspective? Were all the billions flowing into the BRICs, as a result of O'Neill's report, a good investment? Based on returns of the individual countries' MSCI indices...the answer is (a qualified) yes, as shown below. (MSCI ACWI represents MSCI's benchmark All Country World Index and MSCI EAFE represents Europe, Australia and Far East) 

                                            Source: MSCI family of indices, Mantabye. Returns range: Nov 2001-Oct 2021

Since the GS report was published in November 2001, the BRICs have all outperformed the U.S. and global equities. But all of the outperformance came in the first 10 years. Over the past decade, following the Global Finance Crisis, each of the BRICs substantially underperformed the U.S. and global equities. Brazil has especially struggled in the past 10 years, losing investors 4% per year. Even Chinese equities have generated only half the gains as U.S. equities. Perhaps that's an opportunity...now that U.S. equities are at elevated valuations, some of the BRICs may once again be attractive.

The Man Who Solved the Market?

Gregory Zuckerman's 2019 book of the same name sought to provide a look behind the curtains of Jim's Simon's Renaissance Technologies, the most successful (and secretive) hedge fund of all time. Well, sort of...While how RenTec makes money is as much a mystery at the end of the book as it is at the start, Zuckerman provides a good background into the key personalities, investment philosophy, and the scope of RenTec's massive engineering infrastructure that has been critical to its success. 

Renaissance was founded in the early 1980s by Simons, a highly respected mathematician, successful NSA code-breaker and university administrator who left academia in his '40s to try his hand at this finance thing, drawn by...what else?...MONEY! The Firm became a pioneer in using mathematical and scientific techniques to identify hidden patterns in the market. And its flagship fund, Medallion, has been phenomenally, wildly, crazily successful--a veritable money machine!!! How successful? Since its inception in 1988, Medallion has generated annualized net returns of 39%. Effectively doubling investors' money every two years! By comparison, the S&P 500 has returned just 10% per year over the same period. The average hedge fund, represented by benchmark HFRI Fund-weighted Composite, has returned 9%, as shown below:

                                            Source: Gregory Zuckerman, newtraderu.com, HFR

Just as importantly, Medallion generated those returns with a negative beta to the S&P 500, generating 42% of alpha per year. Its returns were not just spectacular but they were uncorrelated to the broader market. In fact, the Fund's best years were in periods of the worst dislocations for stocks: 2000 (+99%), 2008 (+82%), 2020 (+76%). 

                                            Source: Mantabye.com

Mind, you Medallion's 39% annualized net returns are after its hefty 5% management and 44% incentive fees. On a gross basis, Medallion has generated 66% annualized returns. To put that in dollar context, Medallion, which has $10 billion of assets, has produced over $126 billion of gross trading profits for investors (mostly Renaissance employees). It has generated $8 billion of management fees and $51 billion of performance fees for Jim Simons and other shareholders.  

No one knows exactly how Medallion makes so much money. Probably only a few people at Renaissance fully know either. Conceptually, Medallion utilizes statistical arbitrage, exploiting very short-term deviations of historical relationships between assets (think trading horizons of minutes and hours). Betting that these relationships will mean-revert, Medallion uses significant leverage to amplify gains. According to the book, Renaissance is only looking to be right 51% of the time, but that's more than enough. Trading thousands of times a day, those gains add up, especially when multiplied by leverage.

So, does Medallion single-handedly prove that markets really are not efficient? Did Simons really solve the market? Or is Medallion the exception that proves the rule? Perhaps it's the latter. Medallion's consistency, or persistence, is so remarkable precisely because of its rarity. Moreover, there are trade-offs. Short-term trading is generally capacity constrained. That's why Renaissance has capped the size of Medallion at $10 billion and distributes profits annually. (It's now effectively the world's most attractive bond! Producing 39% of yield per year!) Renaissance has tried to scale its business by attempting to develop long-term trading strategies that have less capacity issues. Alas, the Firm's other funds, like RIEF, RIFF or RIDA have not able been able to produce anything close. In fact, REIF, RenTec's longer-term equity trading strategy (think trading horizons of weeks and months) has actually underperformed the S&P 500, since inception in 2006 (by 2% per year): 

So, in the end Simons and Renaissance's many brilliant researchers have figured how to stay just ahead of everyone else, and that's all they need to do. This video basically narrates Zuckerman's whole book in 20 minutes (with some deepfake images from Mr. Robot). Or you can hear RenTech's story from Simons himself:

Stock Market Bubble? Yes!! No!! Who Knows?!

January saw a wild ride in stocks, particularly junk stocks. Widescale vaccine rollouts, permanently dovish monetary policy, massive stimulus with direct cash payments and the possibility of more government aid to come...are pushing equities to record highs. But how much higher can markets go?

Some say we are in a massive bubble and face a reckoning...not if, but when. Others are more bullish, rationalizing reasons why markets fundamentally will go up (a slight tangent here, but most sell-side research are typically self-servingly bullish---at a brokerage house you're never penalized for being bullish and wrong, just for being bearish and wrong. You can't really blame them...."research" is really just marketing...part of ibanks' expenses to get trading commissions; and over two-thirds of the time, the market goes up...so it's a numbers game).

Which brings us to Warren Buffett's "favorite" valuation metric: the market cap/ GDP ratio. A good description is available at the Current Market Valuation blog. The intuition is that stock market growth reflects underlying economic growth. Over the long term it should be roughly 1:1. So, below 100%  stocks are undervalued; above 100% they are overvalued. Currently the ratio stands at 288% ($48.7 T/ $21.7 T) or nearly 3 standard deviations from the historical average...something you'd expect to see once every 300 years. The U.S. is only 244 years old (and GDP data has only been collected for ~100 of those)...so hmm, something to think about. 

Mind you, it's NOT a market timing tool; as they say, "the market can stay irrational longer than you can stay solvent." Another big deficiency of this indicator is that it does not take into account the level of interest rates. Rates influence borrowing and profit margins of companies (and thus their valuations) as well as the the attractiveness of bonds relative to stocks---two competing investable asset classes.

The chart below shows GDP and stock market growth trends. Taken by themselves...clearly the market seems to be running ahead of itself, by a lot.

Now, compare the ratio with interest rate trends (click to enlarge chart below)...historically, when rates are low, the Buffet Indicator is high and vice versa. So as long the Fed keeps liquidity flowing, stocks will run hot. That's the tsunami that overwhelms everything else. And we've written about the empirical evidence of the Fed put. While proping up the stock market is not a part of the Fed's mandate...the Fed pays very close attention to it...believing a drop in stock value creates a negative "wealth effect" that feeds into a cycle of negative consumer sentiment and lower economic demand. And market participants know it and hold the Fed hostage to it.

But if there is one thing that does scare the market it's the spectare of uncontrolled inflation forcing the Fed's hand. Price stability is a Fed mandate. And if the Fed has to choose between controlling inflation and propping the stock maket, its going to choose the former... But inflation is not really a problem for the Fed right now...on the contrary deflation is probably the bigger worry. In fact, a little inflation is good for "greasing the wheels" of commerce. And depsite providing oceans of liquidity over the past decade, the Fed has not been successful at bringing inflation up to the 2% per year that's considered "good." 

If inflation expectations remain low then investors are being rational in choosing stocks over bonds. Currently the benchmark 10-year Treasury bond is yielding 1.2%. The widely followed Shiller CAPE ratio for stocks currently stands at 35.8; in another words, stocks are yielding 2.8% (1/ 35.8) or 2.3x bonds. Sure stocks are riskier, but at such low rates bonds are risky too. So the "equity premium" or spread over bond yields is compressed and investors favor stocks. 

Why has inflation stayed so low despite record low unemployment (at least pre-Covid), massive tax cuts and very accomodate monetary policies? No one really knows...

The net effect is all this probably ends very badly at some point...but only when inflation rears its head. Until then, companies will contine to binge on debt and investors will likely continue to reward them with higher valuations and keep the cycle going...so keep buying Growth and Momemtum stocks and Bitcoin.