It is not surprising that a broker gets things wrong after all it is almost their default state. What is more annoying is that their error is parrotted by so many others who fail to do a simple bit of due diligence. At the beginning of the year, Credit Suisse generates what they call their Global Investment Returns Yearbook which is a bit of a compendium of largely useless details. Or what can be referred to as TWUD – Time Wasted On Useless Detail. And every year pieces get repeated without much thought and this year they had the following statement.
Since 1900, Australia has been the best performing stock market in real USD terms with an annualized real return of 6.43%, very closely followed by the USA, at 6.38%.
You might ask what is wrong with this statement and I would ask you to cast your mind back to your Year 9 Australian History and look at the date. Australia as we know it did not come into existence until January 1 1901 – there was no Australian stock exchange in 1900. So we have a somewhat sloppy error to begin with. You might reply – so what they missed by a year over the course of 123 years is not all that dramatic and I am merely being pedantic but data matters as we will see because it sets the tone for everything that follows from that point.
In the 1880’s each colony had its own exchange – even Launceston had an exchange but I have no idea what they would do all day. It wasn’t until 1937 that what was called the Australian Associated Exchanges was established. Even then the states maintained their own independent exchanges. Amalgamation of the exchanges didn’t occur until 1987 when the ASX was formed.
More importantly, the first share price index was not published until 1938 so quoting figures back to 1900 is nonsense, and doing so without checking is profoundly intellectually lazy.
The more annoying part of such things is that they get endlessly repeated by people without giving them any thought. But distressingly, they use them to try and get people to make financial decisions.
In trading data counts – if you get the basics wrong then you get everything that flows from that point wrong as well.
Maybe they were thinking about the Ballarat Mining Exchange? But I doubt it 🙂
The Ballarat Mining Exchange was built between 1887-91. It was designed by the local architect C. D. Figgis.
The purpose of the Ballarat Mining Exchange was to facilitate the trading of shares in mining companies during the Gold Rush era.
As early as 1857, the buying and selling of shares took place as a result of the formation of mining companies, which was necessary to finance the costly deep sinking of mines.
The exchange replaced an earlier stock exchange established at the corner of Sturt and Lydiard Streets.
Today, it continues to host a multitude of events such as corporate and private functions, fashion parades, exhibitions, live performances, product launches, weddings, cocktail parties, trade shows, markets and fundraising events.
🙂 🙂
Gotcha