A CHART CRIME Recently, as I was scrolling through Twitter, I witnessed a chart crime. Here it is. See if you can spot the problem. If you guessed that the crime is the trend lines are slanted upward then you are correct. This is a chart showing Market Cap to GDP. This chart is meant to be viewed over a long period of time and it shows equity market values as compared to GDP. GDP is constantly growing and therefore the denominator of the ratio is ever growing. In relative terms, total market cap should grow at reasonably the same pace.
Chart Crimes and This Crazy Bubble
Chart Crimes and This Crazy Bubble
Chart Crimes and This Crazy Bubble
A CHART CRIME Recently, as I was scrolling through Twitter, I witnessed a chart crime. Here it is. See if you can spot the problem. If you guessed that the crime is the trend lines are slanted upward then you are correct. This is a chart showing Market Cap to GDP. This chart is meant to be viewed over a long period of time and it shows equity market values as compared to GDP. GDP is constantly growing and therefore the denominator of the ratio is ever growing. In relative terms, total market cap should grow at reasonably the same pace.