That's the age old risk versus reward argument. Some of us prefer to take on a little more risk for potentially much more upside. If we use a medium term target of 28c as an example, buying at the 7c low gives those buyers 4 fold upside to the target of 28c. The sp is currently at 9.7c. We have no way of knowing what the sp will open at after the IDC loan is received. There may be further news on green ammonia before that IDC loan news and the IDC news will likely see the sp gap up. If buyers need to pay 12c for any volume of stock, then upside to 28c is reduced to "just" 2.3 times. There is a very big difference between 4 fold upside and 2.3 times upside and that is a very attractive difference for those that believe that the IDC loan is likely to be approved. IMO it is very likely to be approved which is why I added at an average of around 8c as the base was forming. Those that bought at or closer to 7c will be doing even better but there wasn't much volume at that low for more than a handful of smaller buyers. Larger buyers have to accumulate over time so might pay more than that 12c example if waiting for the IDC loan, even if it opens at 12c. What the sp will actually open at is guess work but the realistic example above shows how big a difference there might be in upside if waiting for news. The sp can rise a long way in anticipation of news with small, low liquidity stocks like this. We saw the sp rise from 7c to 17c in just 2.5 monhs last year, mostly in anticipation of news - the green ammonia tech report in that case. 12c might turn out to be 14c or more as the market anticipates the IDC loan which will provide over A$20 million. That news will be bigger than last year's tech report news and importantly, it green lights construction. So some here might be surprised at how high the sp might rise ahead of that news. To add to the dilemma, if it is say 12-14c or possibly even higher, while the IDC funding risk is removed, you then have much more sp risk because those that bought ahead of the news might want to take part profits. Do you wait for a possible "after the news" correction and risk the sp rallying instead or do you buy the news and take the chance that the sp might correct? One risk diminishes but another increases. Anyone that wants very little risk shouldn't be in the market. The market is for those willing to take a measured level of risk for larger long term results. I know that everyone will have different risk tolerance. That's why we all buy at different times and prices.
MNB Price at posting:
9.7¢ Sentiment: Buy Disclosure: Held
