Odds in Your Favor
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.
I think the main consideration for investment in gold and silver shares is the
(1) character and intentions of the prime investors and management.
(3)the known and inferred and possible resources.
(2)the jurisdiction:Australia,Canada and United States.
After satisfying the above I would partially follow your guidelines as to timing.Depending on market conditions ie “Hot” “Medium” Luke Warm “or “Cold”’,I would usually take a 10-20% position after making a decision.Then I would scare in opportunistically