The turmoil in dot-com stocks has filled some with fear and others with more than a touch of schadenfreude, but few have been able to completely ignore the latest upheavals. Each day, the media emphasise dramatic-sounding shifts in such things as the Dow Jones Industrial Average and the local All Ordinaries Index. But just last week the Australian Stock Exchange threw into operation an entirely new system of measuring the All Ords, highlighting a running controversy about just how useful it is and how it should be presented. This also coincides with the ASX's equally significant move to contract out the presentation of such longstanding institutions as the All Ords to a global information company. The issue arises because there is nothing automatic about a measure such as the All Ords.
Most people accept it as a measure of the overall value of the stockmarket.
To say it rose or fell might tell people that stocks were on average higher or lower, but little more than that. For example, one or two big companies may have a good day, lifting the index, even though the majority of stocks were worse off. In addition, no index actually measures the entire stockmarket. The All Ords was instituted in 1980 with a value of 100. They noted that during the preceding 18 months the All Ords had risen 3 per cent.