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The main point is you never want to be in the position where a stock has fallen by 25% or more. This means that a stock has to rise by 33% or more just to get you back to where it was when you bought it. Taking small losses is therefore much better than taking big losses. This table shows how unlikely it is for a stock to climb back from a 90 % loss:
You'll Never Recover!
Percent fall in share price versus Percent gain required to get you back to even:
10% versus 11%
20% versus 25%
25% versus 33%
50% versus 100%
75% versus 300%
90% versus 900%
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