Widely read:
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Summary: The Editor's Note argued that the market never permanently takes money from a diversified investor, only panic does that. Readers wrote back from both sides of that idea.
Dhirendra Kumar's latest Editor's Note, A fall is not a loss, argued that the market never permanently takes money from a diversified investor. Only panic does that. That is the claim readers tested: some by proving it against their own portfolios, others by pointing to the one company or the one decade when it didn't hold.
Readers who proved it
Mit Sengupta sold a stock he believed in during a fall, and watched it recover without him. He sold Airfloa when small caps were falling through 2025, and watched it recover from Rs 250 to Rs 421 without him. The loss was his decision, and not the market's.
Avinash S held through a severe fall on conviction alone, and the portfolio has since recovered several times over. His portfolio fell from Rs 12 lakh to Rs 3 lakh in March 2020, and he says he "somehow had the conviction to hold on to it". He kept his SIPs running on nothing but the balance sheets he had studied himself. It is worth six times that low today.
Rahul Murdeshwar went a step further in 2008. Instead of just holding, he bought more, and credits that single decision with getting him to retirement early. He moved his fixed income savings into stocks he already held for the long term, then kept adding every month regardless of what the number said that week. He calls himself a "boring investor for 25 years now", and that decision, he says, "turned out to be very wise in hindsight". His portfolio has not gone red since, not even through Covid.
Girish Aralikatti arrived at the same rule on his own, after decades of investing, and now gives it as standing advice to friends. Sixty and investing for over a decade, he tells them: “Stay put. At least five years. Give a chance to compounding." His own letter carried the cost of hesitation too, a capital gains tax he miscalculated on one redemption and a fund entry he delayed too long.
Four readers with four different levels of conviction arrived at the same result. The fall only became a loss when someone chose to make it one.
Readers who disagreed
Nalin Pasricha argued that the rule assumes a market that eventually recovers. The claim's confidence rests on markets that happened to recover, including the US and India. An investor in Japan after 1989, or China after 2007, would have a very different story to tell, since both markets stayed negative or only mildly up for decades.
Suresh Unnikrishnan said the rule holds for an index but not for a stock. Broad, diversified markets tend to recover, he wrote, but individual stocks often do not, and he pointed to the Nifty 500 since September 2024 as proof.
A reader writing in as SM Personal made their point with names instead of theory. Shaw Wallace, Dunlop, Satyam, Kodak and Ambalal Sarabhai are companies whose falls never reversed. For shareholders in these, the fall was the loss, with no panic and no mistake involved, only a business that stopped existing. Their mother's 10 shares of the delisted ORG Systems still sit in a demat account that cannot be closed, three years after her death, because there is no process for writing off a holding that no longer trades anywhere.
Readers who pushed further
Ritwik Varma turned the rule around rather than against it. Dhirendra Kumar's note was about selling too early at the bottom. Varma's point is about never selling at the top. When a portfolio is "a sea of green", he wrote, investors "congratulate ourselves on our great stockpicking skills" and swiftly forget the role luck played, then ride the gains all the way back down without ever locking any of it in. Just as a notional loss becomes a real one the moment someone panics and sells, a notional gain never becomes real if no one sells at all. Both, he wrote, trace back to the same reluctance: loss aversion, whether the number on screen is red or green.
Sivaram Ram said the rule needs a filter before it can be applied safely. A price fall is not the same as a real deterioration in the business behind it. Fresh money during a correction should be invested in the strongest companies, not spread evenly across the wreckage.
Sam Raj and Sarvani Jonnalagadda asked the question every reader eventually has to answer for themselves. Raj wanted to know if the advice still applies when the stock in question, CMS Info in his case, is 50 per cent down in his own portfolio. Jonnalagadda asked something similar from the other direction: How does a beginner build the conviction Dhirendra describes when the one stock she has held for two years is down by more than half, with nothing yet to show for the wait?
That question, not the theory itself, is where the argument actually lands. The rule holds cleanly for a diversified index and for an investor who can wait out a full cycle without needing the money back. It gets harder the moment it meets one company, one demat account, one decision about whether to keep waiting or walk away.
Credits
Mit Sengupta, Avinash S, Rahul Murdeshwar, Girish Aralikatti, Nalin Pasricha, Suresh Unnikrishnan, SM Personal, Ritwik Varma, Sivaram Ram, Sam Raj, Sarvani Jonnalagadda
Also read: The un-Ferrari years are easy to start but harder to end
This article was originally published on August 26, 2026.
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