http://www.muhlenkamp.com/investment/principles/whats_the_new_normal_economics_rules_markets
When using the index value plot, index value is plotted, based on what is being measured, over a number of years. For example if making a plot for food production in Latin America, the index plot may use the average capita food production over several years as its index value. To make the values relative to the plot, the values are multiplied by 100. In contrast, the figure above uses an index value of 0 as it measures the increases and decreases of manufacturing over the years, while taking into account recessions.
When using the index value plot, index value is plotted, based on what is being measured, over a number of years. For example if making a plot for food production in Latin America, the index plot may use the average capita food production over several years as its index value. To make the values relative to the plot, the values are multiplied by 100. In contrast, the figure above uses an index value of 0 as it measures the increases and decreases of manufacturing over the years, while taking into account recessions.
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