Catching a falling knife : Maths behind Gain - Loss

It is natural to look at mathematics in absolute terms. For instance a the difference in share price fall from Rs.100 to 90 and from Rs.20 to Rs.10 - is the same 10 Rupee. But in % terms - in the first case it is 10% fall and in second case it is a 50% fall. 

And there are instances when price falls from Rs.100 to Rs.20 - a 80% fall. 

And continues to slide from Rs.20 to Rs.10 : a further fall of 50% fall. 

While for the earlier investor (at Rs.100), this fall to Rs.10 translates to a 90% fall - up from earlier 80%. For a new investor at Rs.20 - this fall to Rs.10 is a 50% fall.

But a bounce back from Rs.10 to Rs.100 can give you a 900% returns. 

Many investors 'dream of' doing bottom fishing and get rewarded. 

But in reality catching a falling knife is dangerous - unless you are an expert.