Alternatives to a linear graphical representation?

[bob2007]

Hi,

I'm trying to understand stock price movements better than the way percentages work.

i.e. Stock price 10 goes to 20 = 100% gain.
Stock price 20 goes back down to 10 = 50% loss.

I feel like the arithmetic numbers 100 and 50 are drastically different.
And this is not representative of the change. Which is 0 in price.


Part 2

One of the most difficult ways of understanding stocks is that something that goes down 50% can go down further 50%. And STILL can go down 50%.
I don't my LINEAR mind can process something like that. Cause my mind seems to think 50 and 50 would be 100% drop.

I hope I'm making sense. Thanks for your help.

 

[blamocur]

50% is a relative value, and in your example it is relative to different reference values.

 

[lev888]

Hi,

I'm trying to understand stock price movements better than the way percentages work.

i.e. Stock price 10 goes to 20 = 100% gain.
Stock price 20 goes back down to 10 = 50% loss.

I feel like the arithmetic numbers 100 and 50 are drastically different.
And this is not representative of the change. Which is 0 in price.


Part 2

One of the most difficult ways of understanding stocks is that something that goes down 50% can go down further 50%. And STILL can go down 50%.
I don't my LINEAR mind can process something like that. Cause my mind seems to think 50 and 50 would be 100% drop.

I hope I'm making sense. Thanks for your help.

1. % change is relative. Absolute change in this case is 0.
2. When going from A to B you reach the 50% point. 50% left to go. But this 50% also has the mid point (50%). Etc.

 

[Steven G]

A stock is at $1024 and everyday it goes down 50%, that is it loses half its value every day.

1024
512
256
128
64
32
16
8
4
2
1
.50
.25
.125
...
Yes, if you take 50% from 1000 and then again 50% from 1000 you will have 0.
The problem is that you keep taking 50% (that is half) of smaller and smaller numbers. You can do that forever!