A price that falls and comes back is not the same as money that is gone.
Risk is losing money for good.
Three falls. Tap the one that scares you most.
The deepest falls came back. The shallow one, one company, never did.
← Red LinesRed Line 13 of 48 The idea The numbers Where you see it Where it bends This game’s numbersHow strong the proof isBGood proof, with limits Where it comes from
A fall on the screen is a price. It becomes a loss when you sell at that price, or when the thing you own never comes back.
Three people put in €10,000. Ana’s falls to €7,000 and she holds: five years later it is €12,000. Ben’s barely moves: €11,000. Carla’s falls to €7,000 too and she sells in fear: €7,000, for good.
A falling price only hurts for good when you have to sell, or when what you own is broken, like a company that goes bust.
If you must sell soon, a fall becomes a real loss. Money you need in the next few years shouldn’t sit where it can fall far.
Wikipedia: closing milestones of the S&P 500Berliner Zeitung: DAX passes 6,000 (March low 3,666)Fortune: Wirecard files for insolvencyCNBC: investors holding Wirecard after insolvencyYahoo Finance: DAX and S&P 500 daily history
Broad markets came back from their falls over long spans, but single shares often never do, and some markets took decades.
- Triumph of the Optimists: 101 Years of Global Investment Returns Elroy Dimson, Paul Marsh & Mike Staunton, Princeton University Press, 2002
- Do Stocks Outperform Treasury Bills? Hendrik Bessembinder, Journal of Financial Economics 129(3), 440-457, 2018
Checked 2 Nov 2026 · How we grade
- A Strong proof: Many good studies or long official data, from different teams or countries, point the same way.
- B Good proof, with limits: Solid studies agree on the direction, but the size varies, or the data covers few places or few kinds of people.
- C Mixed proof: Some good studies for, some against, or the evidence covers only part of the line.
- D Thin proof: Mostly one book’s argument, one survey or stories. It may be wise, but it has not been tested well.
- = True by the sums: It follows from arithmetic, so no study can overturn it. We still show what real data says.
Howard Marks, The Most Important Thing (2011). In our words, not quoted.
See it in numbers: Losses · Cushion (From Zero)
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