Yes, I can answer this one for you. First, missed opportunity due to greed is not as harmful as a bad investment due to greed. Second, buying at a lower price means that you can buy more shares, so let's think in terms of multipliers.
Third, let's say that the price WILL hit 3. You say: "Let's say there is 10% chance to buy @ 0.60 there is 100% chance to buy @ a dollar NOW".
If you buy now, the multiplier will be 3X with 100% meaning that your expected result will be exactly 3X. If you take a chance that it will drop to .60 with 10% probability, and set a limit buy at .60, then the result is 5X with 10% probability for this case. However, if it does not hit .60, you are not screwed. If you keep watching the numbers, you can buy in at .70 or .80. Therefore, by waiting, there is almost a guarantee that you will get to buy below a dollar.
We can say that there is a 10% chance you get the .60 you are looking for. We can also assume for this case that there is a 20% chance you will get to buy in at .70 and a 25% chance of buying in at .80 if you are alert enough.
2. Now we assume that there is a 45% chance that the price never goes below a dollar again or that your greed causes you to not buy in at .80 or .70. For simplicity, we will assume 3 scenarios: buying in at 1.20, buying in at 1.50, and staying out and missing out altogether, all with 15% probability each.
Let's say that you start out with $100. Take the path of least resistance and your expected result is $300. Play your cards as more carefully and your expected final result is 500*.1 + 300*.2/.7 + 300*.25/.8 + 250*.15 + 200*.15 + 100*.15 = $312, as opposed to $300. I'm giving you the extreme benefit of the doubt. My method assumes no flipping whatsoever, just a limit buy order that you set, then a limit sell order at 3.
There are other very real scenarios that I didn't list that would bring the expected payout from waiting even higher:
1. Just because this never goes significantly below 1 does not mean that we won't have other opportunities to buy around 1. This stock is a total roller coaster and will go up and down.
2. Just because you miss a bottom between .60 and 1.00 due to greed does not mean that you won't have this chance again.
3. If you buy low, then sell on every gap up or spike, you will probably get to buy in lower.
4. If you short this on spikes and gap ups, you could make even more money.
5. The biggest scenario to consider is that this stock may never reach 3, especially if OWCP is a pump and dump. In this case, you can only lose money, not gain, by buying above a dollar.
The road from 3 to 7 can be split into a separate probability model.
AI
