A great article appeared in the Financial Times earlier today. In the tradition of “lies, damned lies and statistics” it puts the recent Dow Jones Industrial Average record of 20,000 in perspective.
Here is how that record looks using regular ‘level’ prices:
So what’s the big deal about the Crash of 1929, anyway?
Well, here is the same chart using a logarithmic scale:
On a related side note, our software range allows analysis to be made both ways: via level prices or natural logs. This 20k DJIA example is as good an explanation as we’ve seen as to why having the choice is a good idea!