Hi @GazD, Ill give my 2 cents on your questions.

I think its pretty much impossible to correctly predict / forecast what company will compound for 30 years. I would try to look at companies based on a 3-5 year rolling forecast, with regular investment thesis and milestone checks. Picking industry leading stocks in rapidly growing sectors/industries or disruptive companies in established industries would be your best bet on possibly picking a stock which has the capability of compounding for 30-years.

Some great points @Vandelay

I look for companies disrupting an old way of doing things (I believe I got this one off @Strawman himself), companies operating in a growing market, companies with strong tailwinds, strong management teams and a long runway for growth. A strong and growing moat ensures they're more likely to succeed over the competition, as does a a management team incentivised to think long term; this is where founders are great. And of course a strong business model, unit economics and margins.

Have to agree with @vandelay mostly as 30 years is such as long period. While we think of the household names as lasting that long, there are many, many companies that do not. I have worked for at least 3x iconic companies that no longer exist. One was Ansett to put it into perspective.

The other thing is the world is continually evolving. I expect my grandparents would have told me this too, but the pace of change is accelerating. When my grandma was born there was no electricity, no plumbing, no 'fridge, no microwave, no air travel, etc

The iphone changed the world only 15 years ago. I have a friend who's dad had a taxi, where the $200k+ plate became effectively worthless less than 10 years ago.

Its easy to look back an see how companies like Microsoft and Google have performed. It was much less so when they were evolving.

@GazD, 30 years is such a long time frame that the only compounders likely to consistently grow for that period of time will do it slowly, or will eventually become so big that they stop growing and their dividends become a proxy for interest rates.

Health (and cigarettes), financial services/banking, infrastructure and airports all fit into this category. None of them are sexy or high growth.

@GazD

I would add to the already great responses the following.

Once you identify those transformational company's, remember the road to 10x or 100x 'bagging' is never a straight line up, and that in context is society and investors belieiving and then not believing and then believing again in any transformational change.

I bought my amazon shares for $300 many years ago, after they had experienced a drop from $1000! And i've been holding on to the rollarcoaster ever since.

@GazD

I would also offer that you're 30yr b&h compounders aren't necessarily 100x baggers.

You're 30 yr b&h are probably more your boring slow growers or an ETF.

Your 100x baggers are probably more 3-5yr holds from 'penny stock' status, i.e. from $0.01 through to $1.00

In my mind I wouldn't want to conflate the two different goals. Both legitimate goals of course.

Interestingly in Mayer's book he excluded mining stocks and the truly microcap end of the market.

The range of stocks which have reached 100 bagger status is quite amazing and the variation in time to achieve it is similarly varied but as a few examples:

Hewlett Packard Return 498 times. Time to 100x = 30.7 years

LOEWS CORP Return 3978 times. Time to 100x = 8.3 years

ABBOTT Laboratories 1965 times. Time to 100x = 27.7 years

Gillette Co 221 times. Time to 100x = 31.7 years

Procter & Gamble 399 times. Time to 100x = 34.7 years

Berkshire Hathaway 18261 times. Time to 100x = 19 years

Franklin Resources (Financial Management) 11,363 times. 100x = 4.2 years!!!

Southwest Airlines (yes Airlines!?!?) 5478 times. 100x = 9.5 years

Wal-Mart 12382 times. 100x= 12.5 years

Kansas City Southern (Railways). 16931 times. 100x = 18.2 years

Of course there are many many more and I agree with the observation made by others that times are 'a changin' as they always are. In this regard, I imagine that the days of 100 bagger returns from railways are done, however, perhaps there will be infrastructure plays on hydrogen which will produce 100 bagger returns over time. I have no idea. Obviously we all love the margins of software and the more modern 100 baggers in the book probably do veer towards software and computing...

The takeaways for me from the Mayer book are:

• identify companies with high growth or potential for high growth (obvious I know)
• identify companies with a long runway for growth (less certainty here)
• identify companies with a high return on equity and the ability to re-invest that equity
• Be prepared to be patient (my current take on this is extreme in that I plan to hold stocks forever unless they're clearly broken)
• And this is potentially the controversial one: Buy a large number of stocks. Mayer discusses the Kelly formula for deducing what size 'bet' to place given your perceived 'edge' which essentially results in betting big when you have a clear advantage. At this point in time I don't see that I have an edge in many stocks over other stockpickers except perhaps for patience and timeline. Therefore I propose to buy a large number of stocks (yes I pay for the diversity by diluting gains) in the hope that a proportion produce truly exceptional returns over the long run...
• Yes perhaps I could just buy a small cap index and be done with it but where's the fun in that!?