Should We Be Panicking About Another Market Crash?
Posted at 7:56 a.m. on Feb. 12, 2014
Matthew O’Brien says, no. “Humans are easily confused, especially by double y-axes.”
“Here’s what the chart would look like if you weren’t trying to scare the bejeesus out of people. First, you index the Dow to 100 starting in February 1928, and see how much it changed in percentage terms between then and December 1929. Then, you index the Dow to 100 starting in July 2012, and see how much it changed in percentage terms between then and now. And finally, you compare those two percentage changes on a single y-axis.”