Key Takeaways
- • Eric Jackson, founder of Toronto-based EMJ Capital, pursues a concentrated portfolio strategy targeting "100-baggers" — stocks with potential for 100-fold returns — with a minimum threshold of 50-fold gains over five years.
- • Jackson maintains a highly concentrated portfolio of only 10 to 12 equities rather than diversifying broadly across indexes, deliberately accepting concentrated risk to achieve outsized long-term returns.
- • The strategy requires investors to tolerate severe portfolio volatility and significant drawdowns; Jackson cited Carvana (NYSE: CVNA) as an example, noting the stock experienced five to six declines of 30-40% plus a single 62% drop during his holding period.
- • Jackson acknowledges that watching substantial unrealized losses during market pullbacks is psychologically difficult but frames steep drawdowns as a necessary trade-off for pursuing 100-fold upside potential.
Summary
Executing this high-conviction strategy requires a radically concentrated approach to portfolio construction. Jackson maintains positions in only 10 to 12 stocks at any given time, deliberately rejecting the diversification benefits of broad market indexes. In describing his philosophy, Jackson noted that he prefers "some diversification through those names" rather than concentrating all capital into a single position while holding the remainder in index funds — a reference to the risks exemplified by companies like Carvana, which has experienced extreme volatility.
The path to achieving 100-fold returns demands acceptance of substantial portfolio drawdowns and volatility that would challenge most institutional and retail investors. Jackson illustrated this dynamic using online auto retailer Carvana Co. (NYSE: CVNA) as a case study, highlighting that the stock endured five to six separate declines ranging from 30% to 40%, followed by a catastrophic 62% single-day drop. Jackson candidly acknowledged the psychological toll of such volatility, stating "You feel really stupid" when watching significant unrealized gains evaporate during market corrections. However, he frames these severe drawdowns as a non-negotiable cost of pursuing exceptional long-term upside, positioning volatility tolerance as a prerequisite for investors seeking multi-hundred-fold returns rather than traditional mid-single-digit annual gains.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.