FoundationsMAD Academy0:46Risk

The Maths That Punishes Big Losses

Recovery is not symmetric with loss, and the asymmetry gets brutal fast — which is the entire argument for cutting losses early.

0:46 · 6 scenes

This lesson is part of a MAD Academy plan.

What the Lesson Covers

  1. 0:00Losing half your money does not require fifty percent to get back.
  2. 0:05The table. A twenty percent loss needs twenty-five to recover. A fifty needs a hundred.
  3. 0:15Why it accelerates. The gain is measured on a smaller base, so the requirement compounds.
  4. 0:24The practical conclusion. Staying under about twenty percent keeps recovery in reach. Beyond that it does not.
  5. 0:33The other cost. Time. A deep hole takes years to climb out of even at good returns.
  6. 0:41Protect against the deep one. The shallow ones look after themselves.
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Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
Educational content only. MadStockAlerts provides market commentary, research, and educational content. It is not personalized investment advice, and nothing here is a recommendation to buy or sell any security. Trading and investing involve substantial risk, including loss of capital. See the Risk Disclosure and Customer Agreement.
The Maths That Punishes Big Losses — MAD Academy Training Video · MadStockAlerts