Permanent loss of capital
Permanent loss of capital is money that's gone for good, as opposed to a paper loss that can still recover if a position is held. It happens when a business's own value is destroyed, through or a severe and lasting decline in its earning power. Selling at a loss also makes it permanent for that investor, locking in a loss that might otherwise have recovered if the business itself was still sound.
This is a different concept from , which measures how much a price swings without saying anything about whether the underlying business itself was damaged. A can be highly and still never produce a permanent loss, and a quiet, low- can still produce one if the business itself is deteriorating underneath a calm looking price.