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Strategies & Market Trends : Gorilla and King Portfolio Candidates
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To: lurqer who wrote (40165)3/10/2001 12:53:17 AM
From: Thomas Mercer-Hursh  Read Replies (1) of 54805
 
If successful, you should see a semi-log chart of an Inflation Adjusted (pseudo) DJIA for the period 1800 to 2000.

This isn't the first time we have seen this chart. It has a few problems or questions.

First of all, half of the data is some "stock price composite" while the other half is the DJIA. Are these related? Do we in this group care about the DJIA? S&P500 might have been more generally applicable at least.

Secondly, what is this linear trendline created on the semi-log presentation and what does any of this have to do with inflation adjustment? As near as I can tell this has the Dow about 10,000 so how can this possibly be inflation adjusted with respect to 1800?

And, guess what folks, linear trends are at the very best rude first approximations to real trends, a reference line from which to more easily gauge variation. I've played some statistical games myself on long term trends and let me tell you that the revealing baseline was far from linear. If that mid-line is supposed to reflect the long term inflation trend ... just a guess since this is in no way clear from the context ... why would one think that a linear model of two hundred years of inflation was at all an accurate view of what actually transpired?

I can imagine some interesting graphs about this data that might provide valuable information. This isn't one of them.
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