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I recently bookmarked this image as a reminder that losses are much different than recouping from those losses. So, if you have a $1000 investment and you experienced a 30% loss (not unheard of for equities) your investment is now valued at $700. This means that you will now need to achieve a 43% return to just get back to your $1000 value.
Really good stuff. Thank you for the wealth recovery chart. Charts are far more effective at demonstrating a salient point than simple text material. Many folks do not handle percentages without making errors.
A 30% discount and an additional 20% discount does not compute to a total 50% discount because of the shifting cost basis. The actual total discount is 44%. Kohl's department stores often deploy this trick in their advertisements.
Best wishes, and a Happy and peaceful Thanksgiving day.
Reply to @MOZART325: I own one of these -90%ers (bought BBRY) @ $57. Selling in the $6 range today. Almost ready to wallpaper my bathroom with the stock certificates. No conviction to buy more...unless "you know a guy... who knows a guy... who knows something?"
I have had a similar experience with Nokia. Bought some at around 15 a few years ago, wrote some covered calls to bring the cost basis down to around 11, It traded down to $2 but recently has quadupled. But I'm still down considerably.
Comments
Really good stuff. Thank you for the wealth recovery chart. Charts are far more effective at demonstrating a salient point than simple text material. Many folks do not handle percentages without making errors.
A 30% discount and an additional 20% discount does not compute to a total 50% discount because of the shifting cost basis. The actual total discount is 44%. Kohl's department stores often deploy this trick in their advertisements.
Best wishes, and a Happy and peaceful Thanksgiving day.
If you are down 90%, then you double your money, you are still down 80%.