Somebody posted a comment about sunk cost fallacy in another post on this sub and it got me wondering, what % gain do you need to recoup a loss. In order to momentarily transmogrify us all into bears, I did some math.
I came up with this formula: %GRTR = 100 * (100 / (100 – X) – 1)
Where X is %loss and %GRTR is %gain required to recoup the loss
From 0 …unfortunately, things get worse from 10 …and %GRTR approaches infinity as X goes towards 100. Please (bear) this in mind if you're watching investments underperform. The hole gets asymptotically worse the deeper you hold, and there's no guarantee the security bounces back. To quote world-famous drug addicted peasant Duncan Trussell, “Hope kills!” Here's some graphs I'm going to try to link and hopefully not get flagged and removed for. If someone good at the maths can check the formula I'd appreciate it.
X
%GRTR
1
1.01
2
2.04
3
3.09
4
4.17
5
5.26
7.5
8.11
10
11.11
15
17.65
20
25.00
25
33.33
30
42.86
35
53.85
40
66.67
45
81.82
50
100.00
60
150.00
70
233.33
80
400.00
90
900.00
100
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