Cory Diary : Making Sense the Risks and Multiples

Mentioned this long ago but thought it is best to write about it again. Often we hear about sensational returns of 10,000 Multiple returns. Below is the Scenarios on the amount invested.

 

Using the Profitable Scenarios on the top, if one has adjusted the risk to be small with small amount invested and achieved 10,000% returns using $0.20 entry price compared to one who invested later at 10 times the price after the company stock price run up midway. We will realise that the later investor has 18x more profit. This is due to the amount of shares bought is 20 times for $2 each.

If an even later investor came in to buy at $10, the absolute profit is $1K. Not too bad interestingly. The first investor can whistle his 10 thousand times profits but is just $99 in reality. A waste of time.

 

Like wise, in Loss Scenario, the opposite follows too.

The Power of Punch Matters and so are the Risks

Cheers,

Cory

2022-0218

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