Why I'm now convinced MND is a compelling buy, page-3

My thinking on portfolio allocation is different from most. I believe if something is a"fat pitch" it means one of two things

1. The likely reward is adequate, and the potential downside risk is very low
2. The likely upside reward is very high, and the potential downside risk is very high

So for instance, if I had an opportunity that is likely to return me 20%+ for the next 5 years, and my capital back, but there is also a 25% chance that I will lose all my money, then I would need to restrict the size of my bet (relative to my capital) so that I don't incur too big a loss if the downside eventuates.

If however, I have an opportunity that is likely to give me a superior return (though I may not know exactly what that will be), but there is only a very small chance of an inferior return (not a wipe-out necessarily, but perhaps less than say 7.5% per annum), then what should form the basis of my allocation decision? Why should I restrict my bet to say 5% of my portfolio? If I do apply a 5% restriction, then by definition, I am really saying that I haven't really got a "fat pitch".

With respect to MND, I believe it sits closer to scenario number 1 (in terms of risk), but suspect it may be closer to scenario number 2, in terms of reward. Yes, the best of both worlds.

I have only just started to build my position in MND. Any restriction to my portfolio allocation, will be on the basis that perhaps I have missed something in my analysis (whch is very, very, possible). But, if the price reduces further, then the risk reduces further. This is not a bet where some singular event (like regulatory drug approval is not granted) may make all value vanish. We can be sure that MND will deliver us a quantum of cash-flows. The exact quantity is unknown. But the lower the price goes, the more certainty we can have that we will not over pay for those cash-flows. That is, the lower the price goes, the more risk is reduced. As such, the higher the bet size should become.