Thursday, January 24, 2008

Graphing Stock Market Crashes for Comparison

The Big Picture posted a chart that compared 4 stock market crashes.
My first thoughts were:
1. The vertical axes are not the same so it looks deceptive.
2. The horizontal axes are not the same so again, it may look deceptive.

This tries to replicate the flavor of the original charts (but perhaps not very sucessfully).

But thinking about it a little more I thought perhaps it was all right. After all, a 500 point drop today is a lot different than a 500 point drop 30 years ago. But I'm still not convinced.

What if the index was plotted using a logscale? Would that make the market crashes more comparable?

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