Logic isnt flawed. You are absolutely correct. But
Post# of 22940
Posted On: 09/16/2016 12:10:13 PM
Re: CountryMac #13079
Logic isnt flawed. You are absolutely correct. But that goes BOTH ways!
If positive news is imminent and truly is transformational wrt to the company/how it is viewed by new/existing investors - the price wil escalate faster on the way up than the way down and you will be paying significantly more for shares and have less control on the price as you will be competingwith a larger audience for fewer shares.
Right now - one can accumulate a large position with minimum impact on price as there is more supply than demand. If one believes the price will be $0.01 EOY, what is the risk of getting fewer shares at a higher price than the reward of getting more shares now at a lower price by waiting?
I agree with your premise. But when considering risk/reward of building a fixed position for long term appreciation - why risk 0.0001 appreciation when supply exists?
Now - if one is trading short term - it is a moot point as 0.0001 becomes significant on a percentage basis for a flip. But at 0.01 - it isnt a rounding error. While the stock will no longer be pumped bh the toxic debt crowd - the runs can still be dramatic and come out of nowhere and if fueled by news with concrete results/guidance - the resulting drop could still provide a significantly higher base in which current prices would never be seen again.
If positive news is imminent and truly is transformational wrt to the company/how it is viewed by new/existing investors - the price wil escalate faster on the way up than the way down and you will be paying significantly more for shares and have less control on the price as you will be competingwith a larger audience for fewer shares.
Right now - one can accumulate a large position with minimum impact on price as there is more supply than demand. If one believes the price will be $0.01 EOY, what is the risk of getting fewer shares at a higher price than the reward of getting more shares now at a lower price by waiting?
I agree with your premise. But when considering risk/reward of building a fixed position for long term appreciation - why risk 0.0001 appreciation when supply exists?
Now - if one is trading short term - it is a moot point as 0.0001 becomes significant on a percentage basis for a flip. But at 0.01 - it isnt a rounding error. While the stock will no longer be pumped bh the toxic debt crowd - the runs can still be dramatic and come out of nowhere and if fueled by news with concrete results/guidance - the resulting drop could still provide a significantly higher base in which current prices would never be seen again.
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