either he knows it's undervalued or thinks that it's undervalued...

either he knows it's undervalued or thinks that it's undervalued and hence is buying in for the longer term- I assume he's conservative or longer term investor- just because a spec is cheap don't mean that it's a bad investment.

a million shares is only 25 grand,

now if you have a million dollar portfolio you would allocate 5-10% of it to specs so 50k-100k which is 2-4 lot's of 25k positions....some of my mates have 2-3M portfolios and they allocate 10% to specs....that's 200-300k in specs, normally taking a 50k position....

They like to hold stocks for 1 year min for CGT relief- if it don't delvier at end of 12 months they reassess it as a hold or sell.

One in particular has 50k worth at 2c from last year- he hasn't sold any and did buy some more on the way up in the 3c range to average up.