Ann: Highly Successful Drilling at Paterson Project, page-70

"Good luck to all who think high risk is a sensible investment... all to their own."

One way to approach high risk investments is looking at expectation values (EV) and then using the Kelly criterion for the bet/investment amount.

Simplified example, lets assume we have a company in a situation where the probability of its share price going to zero is 90% and the probability of the sp increasing by 1000% is 10%. Is it a profitable investment opportunity and if so, how much should one invest in it?

EV = (decimal odds)*(probability of winning) = 11 * 0.10 = 1.10 or 10% profit.

Making such bets/investments is profitable in the long run. What is the Kelly fraction?https://en.wikipedia.org/wiki/Kelly_criterion#Investment_formula

f = p/a - q/b

In our case p=0.1, a=1, q=0.9, b=10 and we get f=0.01 or 1%. One percent of our bankroll would be a good amount to invest in this hypothetical situation.

"Note that the Kelly Criterion is only valid for known outcome probabilities, which is not the case with investments. Investing the full Kelly fraction is not recommended." -Wiki