The Meb Faber Show · Friday, September 18, 2026
Roger Ibbotson explains the importance of using log scales for long-term financial charts and emphasizes the concept of total returns, which he notes was a relatively new measure in the 1970s. He also mentions his collaboration with David Booth and the founding of Dimensional Fund Advisors.
“Anytime you look at a long period of time, you really have to look at a log scale because otherwise, it's just looks like a graph that runs along the bottom and shoots up way at the end here.”
“And by the way, the notion of total returns is pretty new because people weren't reporting total returns even when I first did this in the 1970s.”
“We first came out with this in this actual chart in 1974. We didn't even have small caps at the time there. We just had the large caps. We added the small caps a few years later because actually David Booth and I had a mutual fund advisor and Dave and Rick Schenkfield and David, uh, started dimensional fund advisors together at that time.”