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Showing posts from November, 2019

As near as damn it.

It's 1982 and there's a bull market in the western stock exchanges. After being in the doldrums for 6 years the Dow Jones Industrial Average index is climbing steeply. In London, the FTSE 100 index is also witnessing a steady climb, despite the ongoing war in the South Atlantic. The rise in share prices also leads to an increase in the popularity and prominence of these stock 'indices', the algorithmically derived snapshots of leading stock prices, frequently, used as an indicator of overall market health.

At that time a relatively small North American exchange decides to institute its own new index, allowing investors to discern, at a glance, the state of the market. The Vancouver Stock Exchange creates its index at an arbitrary 1000.0 starting value. The index value is then recalculated thousands of times a day as transactions are processed through the exchange.

Fast forward to late 1983, western markets have continued to boom, stimulating sustained increases in the…