For a trader, it doesn’t matter what price she buys or sells....

For a trader, it doesn’t matter what price she buys or sells. She is always living in danger. If she buys at 5m market cap, what if it drops to 4m, or 3m. Life is always a gamble.

For the long term investor, there are only 3 questions of concern:

1. Will the company survive or be a takeover target
2. What is the minimum price I am willing to pay for the asset and sit on until retirement?
3. What is the minimum possible value the company can be worth or can drop to?

If you compare 5m market cap to 3m market cap, it’s a long distance apart. But is it possible for an established medical company to drop to that valuation? What factors make it impossible? What factors make it possible? Even if it drops to 3m market cap, can it make a huge comeback? Can it instead do the opposite and make a 100x recovery from 5m market cap to 500m in the medium to long term?