That has been the question for quite some time. Once, long ago on a planet far away, I was at the bleeding edge of technology. I moved from my hometown, Chicago, to New York in 1989 to begin a new job as New York Bureau Chief and Senior correspondent of the public television program Nightly Business Report. Among the many hats I wore I found myself reporting most of the stories about technology and trying to convince my bosses to employ as many of the new technologies as possible.
We created a “page” on America Online when AOL was the center of the online universe. That was before the Internet was opened up to commercial and general public use. I remember hosting a “live chat”, a novelty at the time, from Microsoft Headquarters in Redmond, Washington. I had gone there interview Bill Gates and report on the release of Windows 95 with the first appearance of Microsoft’s web browser, Internet Explorer.
In my recent post on mutual funds, I noted that John Bogle disrupted that industry with Vanguard, a mutual fund company that specialized in low cost index funds designed to mimic rather than outperform major market indexes. The other mutual fund companies responded with their own index funds, and there is intense competition between them
Mutual fund shares vs. ETFs
Exchange Traded Funds, ETFs, are another refinement of the fund category. They will certainly figure into your reporting on the fund asset class because they are by some measures the most popular of all exchange traded securities.
For my primer on ETFs, see businessjournalism.org.
In a previous post about indexes, I identified the Dow Jones Industrial Average and the Standard and Poor’s 500 as the two most frequently referenced. They originated as short-cuts that summarized market trends, and are often used as a benchmark against which investment performance can be judged.
There has been an explosion in the number of indexes in recent years. There are hundreds if not thousands available, enough to slice and dice the markets in as many ways as can be imaged. Some are broad-based, like the NASDAQ Composite with more than 3,000 stocks. Others might track a region, like the EURO STOXX 50, based on 50 large companies in the Eurozone. Some follow companies of a certain size, like the Wilshire US Small Cap. And still others focus on an industry, such as the NYSE Arca (originally AMEX) Semiconductor Index.
Business reporters can get up to speed on market indexes with a backgrounder on the Dow and S&PIn my first Financial Market Reporting piece, I complained that many reporters make casual reference to “the market” without specifying what they mean. Usually, I wrote, they mean the Dow Jones Industrial Average, which I called the “best known” stock market measure. The DJIA is just one of a multitude of stock market indexes that pop up in virtually every discussion of the markets, including reports evaluating individual stocks and other investment vehicles. So they warrant a closer look.
The first index
The DJIA was not the first stock market index. It was not even the first index created by Charles Dow. In 1880 Dow, who was 29 years old, moved to New York and got a job at the Kieman Wall Street Financial News Bureau, which furnished financial news to banks and brokerages. In those days there was a lot of “fake” news, designed to tout companies and their stocks. But the Kieman service had a reputation for sticking to the facts.
Dow figured if one responsible news service could succeed there was room for more, and with a fellow reporter, Edward Jones, founded Dow, Jones & Company. The pair produced newsletters and summaries of financial news, which they delivered to financial institutions and investors. Their “Customer’s Afternoon Letter” quickly grew to have more than 1,000 subscribers.
Continues at businessjournalism.org….
A few months ago I moderated a training teleconference for reporters as part of the continuing education program of SABEW, the Society of American Business Editors and Writers. The teleconference focused on Initial public offerings—the first sales of stock issued by a company to the public.
The teleconference is now available as a podcast you can play at any time to hear a panel of experts decipher the language of IPOs and discuss how reporters should cover companies as they prepare to go public. We talked about how reporters can use the U.S. Securities and Exchange Commission’s EDGAR database to access IPO prospectuses and which nuggets of information and red flags they should look for in SEC documents when researching companies that are about to go public.
On the panel was John Divine, an investing reporter at U.S. News & World Report, Lauren Hirsch the deals team leaders and correspondent at Thomson Reuters in New York, Tom Taulli who has been involved in the IPO market since the mid-1990s when he co-founded Web IPO, and Jack Willoughby, a senior editor at Barron’s who wrote the financial publication’s “Offerings in the Offings” column.
You can hear the podcast here.
What fun. I’ve been turned into a quiz, What’s Your Stock Market IQ, at the Reynolds Center.