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mahatmakanejeeves

(56,886 posts)
1. This is why they invented logarithms. Well, not really, but....
Thu Dec 21, 2017, 10:53 AM
Dec 2017

To choose numbers at random, suppose the Dow Jones Industrial Average opens one year at 700 points. During the year, it goes up 700 points. It ends the year at 1,400 points.

Suppose it starts another year at 10,000. It goes up 5,000 points. That's seven times the increase of that other year!

Except it isn't.

Going from 700 points to 1,400 points is a bigger percentage increase - which is what counts - than going from 10,000 points to 15,000 points.

In the first example, the average doubled. It increased 100 percent. In the second example, the average increased only 50 percent.

This kind of boasting is for fools.

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