Imagine these scenarios of buying...29 Sep 2020 10:07
This scenario requires you to believe that the stock price will reach 3.50 within the next year (the usual length for a moderate-long swing trade).
1)If you buy now, at 143, and let's say in a year, it's back at 350. You've made 144%.
2)If you buy at 100, and in a year it's back at 350, you've made 250%.
3)If you buy at 80, and in a year it's back at 350, you've made 337%.
Assuming you invest £1,000 (or a figure so insignificant to you it doesn't matter if you lose it all should RR fold), you'll have profitted in each scenario: 1)1250 2) 2,240 3) 3,062
Ask yourself - is it really going to bounce back to £3.50 a share within a year? Is the risk of losing all of my money substantial given the current performance and climate? Is this company future-proofed against a resurgence/worsening of the virus around the world, or further pandemics within the next 5-10 years? Is it likely there would be a bail out / buy out if things continued to deteriorate?
My thoughts are that it is still incredibly risky to be putting in a penny more than you can afford to lose right now. If you are gambling and are going to be happy enough if you lose it all, then fine. If you are an investor, be smart, don't rush in, wait until the tide starts to turn - don't buy on the way down, as this has been going down steadily for quite a while now with no signs up a let up.