Friday, April 24, 2009

Why Up is not as Much as Down

The market has risen 37% from its low on March 6. But the way it works is that if the market falls 50%, it has to gain 100% to get back to its initial value. If it loses 75%, it has to gain 300% to get back.

Having lost 57% of the value it had on June 5, it will have to increase 131% to get back to what it was. So the 37%, while nice, is not enough to get excited about.

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