When the stocks go down...

A stock has gone down 30% (0.3), how much does it need to go up to get even? Of course it is going to be more than 30%. The formula is y=x/(1-x) where y is percentage up, and x percentage down. So, to answer the previous question, the stock needs to go up 0.3/0.7=0.43 or 43%.

We have graphed this equation (thanks fooplot.com):

As we can see, after big falls it is very difficult to recover: 70% down needs an upward movement of... more than 230%!!