Week 33 Day 6: The Break-Even Trap: Bad Math That Feels Right

After a 50% loss, you need a 100% gain to break even. After a 33% loss, you need a 50% gain. The asymmetry of losses means that the longer you wait to cut a losing position, the harder it becomes to r...

After a 50% loss, you need a 100% gain to break even. After a 33% loss, you need a 50% gain. The asymmetry of losses means that the longer you wait to cut a losing position, the harder it becomes to recover, even if the asset starts performing well.