Dear Compounder,
This summer, your fellow readers at Compounding Quality did something that really surprised me.
📈 More than 2,000 of you specifically asked me for more coverage… of growth stocks.
It was only intended as a theoretical question, when I first asked you whether that might be something to ponder for the future. But this was an intense response; that number comprises more than 20% of you!
And then there was the passionate nature of some of notes I received… one Compounding Quality reader even reported making 13x his money on MercadoLibre.
But he wrote to apologize to me for “abandoning all my lessons” and buying the stock “at a horrid P/E ratio above 77.”
So your reaction left me in a bit of a jam. (Or, “sitting alone with my baked pears” as we say in Dutch, for some strange reason).
There were three new problems in particular…
First Problem: I stay so busy writing Compounding Quality, plus overseeing Compounding Dividends and Tiny Titans, that there just can’t be enough hours in the day to add an entirely new category.
Second Problem: It’s usually assumed that “growth” is something like the opposite of “quality” in the world of investing. An upside-down carnival freakshow where profitability always comes later (or never), higher prices are taken as a buy signal, and whoever exaggerates the most is the winner. Indeed, just think about what else was happening this summer at the same time:
I happen to see growth investing quite differently myself. Because I do think it can be done with mathematical rigor and sound judgment. And it seems like 2,000 of you are thinking the same way.
(So is Warren Buffett, who just overruled his own handpicked successor C.E.O. at Berkshire Hathaway… to load up on 106 million shares of Google. Even though they’re going all-in on the A.I. race, and just reported their first negative free cashflow in two decades.)
But you might ask how I came to this more balanced viewpoint. And it turns out the answer is rather embarrassing.
Which brings me to my final problem, as well as a solution for all-of-the-above that you may find quite compelling.
Third Problem: I’ve just lost a bet, and now I owe $300,000 to a man named Kris Heyndrikx.
Now to be fair, this isn’t just some guy I met on the street. He’s actually a good friend of mine… you can see us out for a bike ride in the photo at the top of this page. Kris is a former professor, and even worked in the Belgian parliament at one point.
More importantly for you, he’s one of the world’s best growth investors. You may have read his work on Seeking Alpha, or heard him on podcasts like Investing for Beginners and Dividend School. Just over the past few years, he’s made:
+1,818% on SHOP
+971% on CRWD
+795% on NET
+365% on AMD
and +142% on ASML
And as for that bet…
Well, since Kris and I happen to be together again tonight as I’m writing this, at the same bar where it was first made, maybe we’ll help each other remember. Just click to play the video:
But for anyone who’s having trouble loading the video, or just got too bored:
🗓️ Exactly three years ago, in October 2023, I got into a friendly argument with Kris. It was thick with investing methodology, which we’ll discuss more at “G-Day.” But basically, we agreed on the suitable time horizon for quality stocks, and even on most of the appropriate metrics and ratios to select them. What we disagreed about had to do with our allowance for model error. To make a long story short, I saw model error as something to minimize or even eliminate, whereas Kris saw it as the #1 source of outsized investing returns.
💸 The best way to settle that sort of argument is to put real money at stake… so I told Kris I would bet him $300,000. My best stock idea against his.
🤝 But since Kris is a gentleman, and I had already consumed a few very strong Belgian beers by that point, he immediately suggested the following. “Once he won the bet,” instead of paying him in cash, I could simply invest $100,000 each in three growth stocks he selected for me. (And I allowed him the reverse for “when I won the bet.”)
🏁 My stock, Medpace, became one of the first official Compounding Quality selections the very next week, and went up very nicely by 150%.
💅 While his stock, Nvidia, was sure to lose… because his own holding was already up 1,735% in trailing gains the night we made the bet, which was certainly a stock “priced to perfection” if I ever saw one.
🏆 You can figure out the next part… both from reading financial news and from thinking about the compounded NVDA return at the top of this page… Kris’s stock gained another 424% over the past three years. He definitely won the bet. (And to top it off, he’s picked 5 other stocks that better than doubled in the meantime.)
What this all means…
… is that it’s now time for me to pay up.
So to honor this bet, I’m going to invest $100,000 into each of the three growth stocks that Kris recommends to me. And I’ll give him from now until Wednesday, 12/16 @ 8:00 AM E.S.T. to tell me which ones.
But can you see why this might also be a solution to our other problems as well?
Because over the past three years, Kris has continued to “compound” his incredible track record as a growth investor. Not just on NVDA, but on dozens of other winners as well.
And meanwhile, it seems that an appetite for growth investing has also been compounding inside of our community this whole time. For at least 2,000 people, if not many more.
That’s why I’ve decided to tell YOU more about these 3 growth stocks on that same date… and make an equal pledge to any readers who attend, that will be worth a total of $300,000.
It will be a day when we all learn why these kind of stocks have gone on such an incredible run over the past few years… and whether it can possibly continue.
A day when you decide whether this is a good complement to your quality portfolio, as I already have.
And a day when, at the very least, you’ll get a FREE opportunity to access some quite unusual insights on the stock market from one of the world’s best growth investors.
It will be… G-day.
And again, you can sign up right here for free, by clicking the yellow button:
But since G-Day won’t be for a few more weeks, I want to help you get ready in the meantime.
So if you sign up today, you’ll also get Growth Investing Academy reports from me & Kris every Wednesday in your email inbox. Until the week leading up to the event, when you’ll get a report every day of the week.
And then, on the morning of G-Day, we’ll wrap up all of those lessons into a new e-book for you that we’re calling The 10 Most Dangerous Myths of Growth Investing.
But since some of this e-book is already finished, we’ll go ahead and send a first installment (“beta copy”) to you today. There’s no point in waiting when these topics have proven to be so urgent to our community:
Then, we’ll continue to add more detail to those topics during your Growth Investing Academy email series, and add some new ones as well:
Think of all of this material as just a warmup to get you ready for the main event.
These email reports and e-books are not required reading.
But I think you’ll find them helpful in preparing yourself to grasp the topics that Kris & I will cover in more depth on “G-Day.”
Because whether or not you ultimately do want to add more growth investing stocks to your portfolio over the next year, or you just get another window into thinking about the wild times we seem to be living in, this event is for you.
And speaking of technology disruptions… we do have unlimited web-hosting capability for G-Day.
In theory.
⚠️ But we literally saw the Netflix and Amazon websites both crash during this same part of the calendar last year. And Substack itself has crashed four times in the past year, most recently in August.
So let’s keep things simple – and safe – and limit this to webinar to the next 2,000 who sign up.
That way, along with the 2,000 people who already indicated their interest in growth investing to me earlier this summer, we can reach 40% of the entire Compounding Quality audience.
(Although we may send this invite to a few other friendly outlets at well.)
Keeping G-Day to a reasonable attendance limit will also give us a shot at answering all of your questions.
And if we run out of time during the webinar itself, we’ll put more answers into another follow-up report.
The point is, I can’t be sure whether this opportunity will still be available tomorrow.
Or even later tonight.
So I urge you to sign up NOW….
Remember, this is all free if you sign up today:
🔓 Your unlocked access to the official “G-Day” growth investing webinar with Pieter and Kris on Wednesday, 12/16 @ 8:AM E.S.T.
🎒 Your Growth Investing Academy reports in the days leading up to the event. There will be at least 25 of those in total… I told you Kris used to be a professor & “parliamentarian”! This guy does not spare depth and detail.
📗 And your 10 Most Dangerous Myths of Growth Investing e-book on the morning of G-Day. So all of that depth and detail will be distilled for you into a format that’s easy for you to refer back to over the coming year.
Thanks for your time today.
And I look forward to introducing you to Kris Heyndrikx in person on December 16th.
When I reflect back on it, I’ve never been so happy to be wrong about something. So I suppose model error must be the #1 source of growth in life as well.
Yours,
Pieter Slegers
CEO of Compounding Quality
PS Sign up here for G-Day and grab our report.