Key insights
- This is a hypothetical scenario about winning a lottery invested in a mystery stock. It explores risk tolerance and market timing strategies. There is no direct market impact.
I've got an interesting discussion we can make based on this hypothetical scenario
The government launches a new lottery system, and you win $25 million! Instead of a normal lottery where they pay you directly, they deposit all of your winnings into a mystery stock that you can hold onto for up to 2 years. You can track this stock from an app they made for it but it doesn't give you a graph. It just shows you how much percent it's gone up or down since it started.
In 3 months time, you see it at 124.82%, turning your $25 million into $56.205 million. However, it has been fluctuating a bit and you've seen some big drops.
Do you cash out the moment it starts dropping or wait for a higher peak? If you wait, what percentage are you aiming for?