Hi Kevin. And yes that is what it is all about “risk/reward” as you stated especially with BB stocks. And it is important that I always remember that BB stocks carry a much higher risk then the blue chips, but if they go one can garner huge upsides.
Case in point, if I own 1000 shares of a high quality NYSE stock at $30 ($30,000) and it goes up to say $40 ($40,000) I have a 33.33% gain or $10,000. And if it happens to go south, say to $20 ($20,000) I have lost 33.33% or $10,000.
On the other hand a stock such as EVDS selling at $0.40 with 25,000 shares ($10,000 – 2/3 less then above) and it goes to $0.80 ($20,000) I have a 100% gain or $10,000 (same dollar gain as above) with a lot less invested. And if it goes south like the example above 33.33% that is only a $3,333 loss.
The point I am trying to make is that if I do what research and DD I can that in either case there is no guarantee that I will be right. But the risk/reward in the EVDS is better on the reward side and not as bad on the risk side as the dollar goes. Along those lines, the one rule I personally follow is that I will never have more then 20% of my portfolio invested in BB stocks at any given time and most of the time that is around 10-12%.
Environmental stocks such as EVDS have a huge upside potential just like many of the Internet and Technology stocks that we all know about. And a huge downside potential also. Again as you said “Time will tell, but I like the odds”, I could not agree more. Sometimes for me it takes betting on that gut feeling.
Regards,
Bill Fortune III
|
