Can anyone tell me the exponential function to calculate dradowns and recoveries?

Water Cooler Investing
#1

Hello,

Can someone tell me how to calculate exponential function for recovery of losses.

When investing is I loose 1% of my account I need to gain 1.01% to Breakeven and if I loose 50% of my account I need a recovery of 100% to Breakeven.

This is obviously a exponetial function but can anyone tell me the exact function besaides de general form of f(x) = K * b^x

Thanks!

#2

Question is not clear. Are you asking for the functional form of the recovery gain that offsets a percentage loss? If so, you need to gain r/(1-r) following a loss to breakeven. I don’t know what you are talking about with the exponential thing.

#3

What I mean is not the math behind the drawdown or the recovery but either the function of the the following chart that has in the x Axis the % of loss and in the y axis the % needed to recover from the loss.

https://ibb.co/ngJay5

As you can see the chart is a exponential function and I’d like to know what the function is. In other words i want to be able to subtitute de X value for 50% and the result of Y should be 100% meaning that if I loose 50% of equity I need a 100% increase from bottom to recover.

Hope this explanation helps.

#4

Here you go, brah - since you are obsessed with exponential form:

y=exp[ln(x/(1-x))], where 0

#5

Perfect!

Thank you very much.