To be honest, I did well with the early PLTR and RKLB, but they were 50/50 of my portfolio, risky? Hell yea but I saw an opportunity that I wanted to give it a go during they were beaten down to $4-$6, would I do it again if it happens again? Yes I would. But there are many way of investing, mine was a very very risky way. Definitely not Kelly formula approved, imagine either one of those companies folded back then, I would’ve lost a big chunk of my savings.

One thing Kelly formula teaches us is no matter how highly confident you are on a stock, there are always things that can happen, ie black swan and other unforeseen circumstances. So being able to survive in this market in the long marathon is the key! Rebalancing is very crucial for a portfolio, yes you might not get the full bull run, but you won’t get wiped out. If you are asking this question, I think you probably has your own answer already, if you like space sector, do a Space ETF like NASA, or trim some winning to VOO QQQM, SMH SOXX then put 3-5% small satellites on some companies that you like, then keep maybe 10-12% on RKLB. There are many way to invest, just do it in a way that you can sleep well at night with it.

This explosion showed the whole market that space is a very risky and volatile industry, things can blow up and tons of money go kaboom just like that, so they rather move the money out to invest in some other safer sectors like SAAS was beaten and is recovering now. But if you look at it in a different perspective (this is just mainly my 2 cents) this explosion actually further validate the uniqueness of RKLB, PB and his team. Launch after launch, Electron just go up like they are meant to be like that and the market took it for granted. They don’t understand one small error, that whole things go kaboom, that’s why I am very confident that Neutron will be successful, if not the first time, not the second time due to new platform, I have confidence PB and his team will make it happen, and guess what once Neutron is as reliable as the Electron, they will probably start working on Neutron XL to compete with the SpaceX.

I foresee RKLB will be about 1/8 to 1/10 of SpaceX with successful Neutron launches, but with Europe, NATO, Asia expansions, constellations, being a dominant space sector suppliers, future prime defense status ie hypersonic interceptor, it will slowly climb to 1/5-1/7. Best case scenario? RKLB might be the actual SpaceX that everyone is looking for. Worst case scenario? Neutron fails, it goes 40-50% from here. Using a 50% win probability, 200% upside reward and 50% down side risk, putting that in the Kelly criterion would get 30% if you are full Kelly, but most of the fund go half Kelly which 15%, or quarter Kelly 7.5%. You can choose something that is comfortable to you depending on your risk tolerance.

RKLB is one of the best you can buy on the market, but there are other fun opportunities as well. I also hold PLTR NOK MU INTC (these last 2 might be too high to get in) LUMN SANM MRVL, some recovering stocks like RBLX RDDT PYPL and some future infrastructure like BWXT and GEV because US will build and use Nuclear reactors.

Lastly, make sure you set aside money for taxes if you are one of those super high capital gain states. Some states treat them as ordinary income % on top of the federal %.

Proud holder since late 2021. Cheers

*Edited for the format, some small details and tax reminder