I don’t need to hit a lot of ten baggers.
I try to find cases where very little of any upside scenarios are priced in.
If I am paying nothing for a project or target it can still be a 1:100 shot and I would not be overpaying.
When I think the downside is limited and the upside is open ended I go big.
I can for example feel like a 10% position in a stock at price X is warranted…
And then feel like the R/R is so positively skewed for the same stock at X-20% that I could warrant a 30% position.
The R/R gets exponentially better as the share price falls and vice versa (all else equal).
Talking about risk is worthless unless one talks about how much is priced in of a given scenario and then what the chance of success and prize of said success would be.
In other words: I have an infinite appetite for anything where the downside risks are already priced in.