Stock price graphic plots should always use logarithmic scale. Spot the differen...

chollida1 · on July 25, 2014

I'd disagree.

Plot MSFT US Equity over the past 10 years and tell me how a logarithmic scale on the y axis would improve over a regular y axis?

Most stocks don't grow logarithmically, especially over shorter periods of time.

Not to go all appeal to authority, but Bloomberg and Reuters, the two top names in financial information show their charts using a regular, non logarithmic scale. If you think logarithmic is always better you should take it up with them:)

EDIT, the link below actually illustrates my point as it says that logarithmic is good for large jumps, which as I mentioned, don't usually happen over the time periods that people view returns.

btczeus · on July 25, 2014

Well then think again. http://stockforecast.wordpress.com/2010/03/05/using-logarith...

So you say a jump from $30 to $31 is equal to a jump from $3 to $4. I thing that is misleading.

When price jumps are small the error also gets small, but it is still there.

apaprocki · on July 26, 2014

A Bloomberg terminal lets you display anything you want in logarithmic scale if you so desire.

Anderkent · on July 25, 2014

It says they show 'both big and small' changes acurately, not that it's good for large jumps.

Avalaxy · on July 25, 2014

Not necessarily stock prices, but exponential growth. Not all stocks grow exponantially.

btczeus · on July 25, 2014

It's not about the rate of the growth. It reflects better percentage movement (that's what's important). Nominal movements in price are meaningless. Really. Thing about it. A 100% growth at $10 is the same as 100% growth at $100 if you want to calculate revenue but it is not reflected as that in a linear scale.