Last night we had a good conversation with one of our favorite wise men of the markets. He mentioned that a couple of percentage points drop in the market is not exactly a historically unprecedented or terrifying event. It definitely shocked people who haven't seen this kind of volatility in a while but grown-ups should know better, he said.
So if all that talk of absolute numbers confuses people, maybe we should talk in terms of percentages instead. But that probably won't help the public understanding much because people aren't too good about thinking in percentage points. It's too much like math, and no one likes math. Actually, most people don't even dislike math. They just don't have much of a relationship with math at all. It's like that kind of obnoxious cousin you haven't seen since you were a kid. He kind of slips your mind. Yeah, that's math.
So we were glad when a reader send this chart this morning. It helps put Tuesday's "market plunge" into a little bit of perspective. And surely people can think in terms of pictures, right?
Posted by voiceoftheemployee, Mar 02, 2007 12:38PM
that chart is meaningless. use 100 pt increments instead of 2000 pt on the vertical axis and the chart tells a different story...