Multibagger Back Testing

I have screened stocks with basic filters generally associated with multibaggers. Sharing below filter criteria. 10 stocks identified out of 3000+ stocks. 5 years stock price performance shows that even a uniform allocation of capital & hold strategy would have grown by 17 times while Index grew by 1.7 times.

This 76% CAGR return.

I would request VP friends to critically analyse the method, find flaws, errors if any. Also can this screen be safely applied for next 5 years. Also welcome if anyone has done back testing & stuff like this.


Two Questions !

  1. Was this fliter applied to short list companies in the year 2011 or is it being done now (if it’s the latter, then it could be hindsight bias)
  2. It will be good to analyse how much of the price change is contributed by price multiple expansion and how much is due to earnings growth (EPS).
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Dear Anupam,

A nice & unique way to analyse stocks in the hindsight.

I remember the following 2 quotes from the legendary Warren Buffet

1) If past history was there all to the game, the richest people would be librarians.

2) The investor of today does not profit from yesterday’s growth.

Although the above mentioned method can be a good way to study the characteristics, as to what made these companies to the elite 10., but these can / cannot be good investment picks., as investment is all about what the company does in the future.

Also, the companies that have passed the filters now., might have not passed these filters 5 years ago.

But I still admire your out-of-box thinking to backtest the stocks.



Would your screen have picked the same set of stocks 5 years back? if not so what is the performance of the screen with the set of stocks it would have picked 5 years back?

Just putting in words the thoughts I am having . :wink: