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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael Thompson,

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Speaker 1: and good afternoon. Sean Aylmer.

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Speaker 2: Good afternoon, Michael.

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Speaker 1: Sean, great question today. This one is coming from Joey

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Speaker 1: via Instagram. There's, of course, many ways to send your

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Speaker 1: question in Instagram, LinkedIn Facebook, or at Fear and Greed

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Speaker 1: dot com today you but Joey chose Instagram and he

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Speaker 1: said the ASX hit eight thousand points this week. We

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Speaker 1: hear this kind of statement all the time. But what

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Speaker 1: are these eight thousand points? What does it actually refer to?

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Speaker 2: Over to you, Sean, good question. Well, the points actually

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Speaker 2: represent in index. They don't represent dollars or units of anything.

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Speaker 2: It's just an index so that you can measure things

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Speaker 2: today versu the year ago versus year's time. So the

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Speaker 2: current SMPA six two hundred started on the thirty first

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Speaker 2: of March two thousand. That's when this index was created.

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Speaker 2: Its first value was three thousand, one hundred and thirty

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Speaker 2: three point three points, which is an unusual starting place.

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Speaker 2: I do agree, but it was equal to the value

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Speaker 2: of the all ordinaries. Now the all Ordinaries is actually

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Speaker 2: a broader measure of stocks on the AX. It too,

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Speaker 2: is another index. It includes about five hundred companies. It's

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Speaker 2: much older than the ASEX two hundred. So the Order

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Speaker 2: Ordinaries was created back in nineteen eighty and it was

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Speaker 2: given a value of five hundred points. That grew to

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Speaker 2: three one three three points three points. On the thirty

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Speaker 2: first of March two thousand they introduced the AX two hundred.

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Speaker 2: That's what was given. So when we say the index

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Speaker 2: has gone through eight thousand points, always saying is that

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Speaker 2: the value of the market is about two and a

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Speaker 2: half times the value in March two thousand. That's all

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Speaker 2: it is. Joey's alluding to the nation that a number

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Speaker 2: like eight thousand points represents something important, Like is it

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Speaker 2: more important than seven nine hundred? Is it less important?

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Speaker 2: And you know two hundred and forty one points? It

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Speaker 2: Isn't it just it doesn't mean anything. Really, It's just

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Speaker 2: that we humans like big round numbers.

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Speaker 1: But don't you hear about like those big round numbers

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Speaker 1: being psychological barriers? And you hear about it in the

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Speaker 1: US a bit as well, where different indexes kind of

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Speaker 1: can't quite push through a certain level, and then finally

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Speaker 1: it does and all and everyone just breathes a big

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Speaker 1: sigh of relief.

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Speaker 2: But it's like the one hundred meters, what's the record

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Speaker 2: for one hundred meter is nine point five eight or

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Speaker 2: something or other, like, will anyone ever get below nine

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Speaker 2: point five for one hundred meters? It's not much difference

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Speaker 2: between nine point five one and nine point four nine,

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Speaker 2: But it's just kind of what we want. And the index,

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Speaker 2: the market is exactly the same, okay. Now, the AX

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Speaker 2: two hundred is just part of the AX, and the

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Speaker 2: AX is the Australiing Securities Exchange. They're actually more than

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Speaker 2: two hundred companies listed on the AX, and the AX

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Speaker 2: two hundred measures the two hundred largest. The index itself

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Speaker 2: is weighted, so the Commonwealth Bank, the largest company on

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Speaker 2: the BASS, gets a higher weighting in the ASEX two

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Speaker 2: hundred than the number two company BHP. BHP gets a

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Speaker 2: higher weighting than the number three company CSL, and so

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Speaker 2: on and so on. Once every three months, Dow Jones

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Speaker 2: Indices checks to see if the two hundred on the

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Speaker 2: list are still the largest. If they're not, it changes

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Speaker 2: the index. Finally, a comment on the AX. It was

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Speaker 2: actually formed in nineteen eighty seven. Prior to that there

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Speaker 2: was different state based exchanges. They emerged nine to eighty seven.

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Speaker 2: Then in two thousand and six, the Australian Stock Exchange

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Speaker 2: merged with the Sydney's Futures Exchange and that created the

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Speaker 2: Australian Securities Exchange. So the whole point to Joey's question,

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Speaker 2: It's true the actual number doesn't mean much. It's just

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Speaker 2: an index that measures are numbers now versus a year's

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Speaker 2: time versus fifteen years, and that's all it is.

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Speaker 1: I'm just going to ask you a little follow up

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Speaker 1: question here the risk of making myself sound ignorant, but

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Speaker 1: the all ordinary I didn't realize that that that was

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Speaker 1: five hundred companies, and so that is that the equivalent

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Speaker 1: of could we essentially be calling that the S and

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Speaker 1: PAX five hundred broadly? Yeah? Yeah, I have learned so

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Speaker 1: much in the last four and a half minutes.

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Speaker 2: Yeah, I mean, I suppose. The point is that the

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Speaker 2: ASEX two hundred by far makes up the big value

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Speaker 2: of the AX, And to be honest, the top ten

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Speaker 2: stocks makes up a big value of the ASEX two hundred,

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Speaker 2: or the top twenty stocks certainly like the majority of

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Speaker 2: the AX two hundred. So yeah, it's kind of do

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Speaker 2: you know that you guess what the first stock ever

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Speaker 2: traded was? Well, no, now that's not quite true. I

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Speaker 2: have to think about this. So the first company founded

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Speaker 2: in New South Wales. I want the current day name.

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Speaker 2: It doesn't have to be you don't have to get

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Speaker 2: the name right, but it's the current.

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Speaker 1: Was it a bank, Yeah it was, and it wasn't

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Speaker 1: the Common Bank.

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Speaker 2: No, it was westpank was a bank of New South Wales,

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Speaker 2: incorporated in eighteen seventeen. Oh and then they were like

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Speaker 2: they didn't really trade then. It was about the eighteen fifties.

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Speaker 2: I think that stock exchanges were formed places like Melbourne, Bendigo, Balerrette.

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Speaker 2: They all had their own stock exchanges are pretty short lived,

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Speaker 2: but kind of One of the little trivia things good

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Speaker 2: on for you is that the original share brokers, with

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Speaker 2: these two guys Matthew Greekson and William Barton. William Barton

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Speaker 2: is actually the father of Edmund Barton, who's Australia's first

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Speaker 2: Prime Minister, got.

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Speaker 1: A fantastic piece of trivia to finish on.

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Speaker 2: That is a good piece of trivia isn't it.

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Speaker 1: Yeah, God, you have. You've certainly delivered today. You've answered

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Speaker 1: Joey's question, you've answered my question, and then you've added

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Speaker 1: about three pieces of trivia on.

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Speaker 2: To the end.

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Speaker 1: So I know we are marking our own homework here, Sean.

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Speaker 1: But I'm going to say a high distinction.

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Speaker 2: Oh once again, here we go.

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Speaker 1: I'm on a surprise. That's seven high distinctions in a row.

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Speaker 1: Thank you very much Joey for the question, and thank

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Speaker 1: you Sean.

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Speaker 2: Thank you, Michael, Thank you Joey for the question. It

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Speaker 2: was a good one, indeed it was.

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Speaker 1: Remember if you've got something you'd like to know, then

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Speaker 1: send it through via LinkedIn, Instagram, Facebook, or at Fearangreed

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Speaker 1: dot com dot a. You are Michael Thompson and this

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Speaker 1: to ask Fear and Greed