February 13, 2009

Long-Term Log Scale Chart Provides Context ($INDU)

By Chip Anderson
Historical
Ditc20090213


How bad is it?  How big was the Internet bubble?  How does the current decline compare to the 1987 crash?  It's all here in black and white (and red and blue).  On a log scale chart like this, movements of the same percentage appear to have the same height regardless of the point values.

The key take away here is that when the Internet bubble burst in 2002, the market went back to the "normal" rate of climb that it established after the crash in 1987.  The current economic crisis destroyed that trendline in mid-2008 and is therefore much more serious.

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