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Are the axes in the second chart swapped? It looks like it should say "Return" on the horizontal one and "Frequency" on the vertical.
by mike_ivanov 8y ago
Are the axes in the second chart swapped? It looks like it should say "Return" on the horizontal one and "Frequency" on the vertical.
- anujabro 8y agoMike, thanks for the observation! The chart is correct, but theoretically you could flip the axes and the shape of the chart would still be true. Power Law Distributions in early stage investing a low frequency of high expected returns, and high frequency of low expected returns.
- mike_ivanov 8y ago"but theoretically you could flip the axes and the shape of the chart would still be true." I'm not sure what you mean. I just have tried literally what you have suggested, and of course it is not true. Here's the code: x <- rnorm(1000) h <- hist(x, breaks = 100) plot(h$counts, h$mid) Am I missing something obvious?