Obviously, if there were a reliable formula to determine which companies would deliver 100x, 200x, or even 1,000x returns over the next few decades, we'd all be rich. Unfortunately, there's no factor, or combination of factors, that guarantees that level of performance.

However, one of the best things to do is to study some of the stocks that have already done it, and there are more than you might think. In this article, we'll take a look at five interesting examples of stocks that turned early $5,000 investments into millions of dollars, and what investors can learn from them.

5 Millionaire-maker stocks

I won't keep you in suspense. Here are five stocks that would have taken a $5,000 investment in their early days as public companies and turned it into seven-figure wealth (or more) in the years since.

Company (Symbol)

IPO

Total Return Since IPO

Value of $5,000 Invested

NVR (NVR -0.30%)

1993

40,950%

$2.05 million

Amazon (AMZN 0.90%)

1997

113,900%

$5.70 million

Apple (AAPL 0.42%)

1980

138,600%

$6.94 million

Microsoft (MSFT -0.15%)

1986

367,900%

$18.4 million

Berkshire Hathaway (BRK.A 0.63%)

1964*

3,220,000%

$161.0 million

Data source: yCharts, Berkshire Hathaway shareholder letters. Berkshire has been a public company since the 1800s, but 1964 was the year Warren Buffett took over.

3 Valuable lessons to learn

As mentioned, there's no magic formula to find the next millionaire-maker stocks. But there are some extremely valuable lessons you can learn from these success stories that can put you in a position to find companies that are more likely than others to do it.

Volatility and missteps are OK

Just because a stock is volatile now doesn't mean that it doesn't have massive long-term potential. None of the stocks on the list had a straight path to strong returns. Even Berkshire has fallen by 50% or more from its previous highs a few times. Amazon once fell by 95% from its peak after the dot-com bubble burst. Even if you bought at the worst possible point before that crash (the top of the bubble), you'd be sitting on roughly a 20-bagger today.

Some of the most innovative stocks in the market have fallen by 70%, 80%, or even 90% from their peaks in 2022. But that doesn't mean they can't be long-term winners.

Leadership is a major X-factor

It's tough to overstate the value of good management. All of these businesses were led by passionate and engaged founders, and continue to be led by their longtime proteges, with the exception of Berkshire (which was technically founded in the 1800s). While most mega-cap companies are not founder led, it is definitely correlated with success when it comes to innovation and disruption, according to several studies.

Apple and Microsoft were founded and built by some of the most innovative minds in their respective industries in Steve Jobs and Bill Gates. NVR's founder pioneered an asset-light approach to homebuilding and did a great job of using this ultra-profitable business model to grow and return capital to investors. The point? Great management can make the difference between a promising idea and a life-changing investment.

Identify a competitive advantage

Finally, all of these businesses had identifiable competitive advantages during their most exciting periods of growth, and still do today. For example, Microsoft's innovative software products created a major network effect in its earlier days. Apple's ecosystem of products gives it tremendous pricing power. NVR's asset-light homebuilding model frees up more capital to reinvest in the business and also makes it easier to get through tough times. And Berkshire's willingness to invest in non-controlling stakes in businesses (its closely watched stock portfolio) gives it an advantage over other conglomerates.

Focus on finding great businesses

As a long-term investor, your goal isn't to gamble on the "next big thing." Instead, you should aim to invest in businesses that have excellent leadership, competitive advantages, and large market opportunities, and hold them for as long as management continues to execute.