Sketchplanations

Explaining one thing a week in a sketch

Asymmetry of returns

It’s a funny thing, when you think about it, that if you owned a stock in the market and the value went up 50%, and then went down 50%, that it wouldn’t end up at what it started.

Another way to look at it, is if you owned something worth 100 and it lost 50%, it’d be worth 50. To get back to being worth 100 you’d then need a 100% gain. 

Huh.

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