Trends in the FTSE 100

27 years of data for the FTSE100 Share Index. Also shown is a line which follows the trend of the index from 1984 to 1994. Data from the Financial Times. Click for larger version

Since reading the Financial Times the other week I have come over all financially-minded and so I present the above graph to you for your consideration. I was very surprised when I came across it on the FT website – it shows a perspective on recent stock market turmoil which I have never seen on the BBC News. It shows approximately 27 years of data for the FTSE100 Share Index – a general measure of stock market prices for UK companies. Also shown is a line which follows the trend of the index from 1984 to 1994 showing roughly 7% growth year-after-year for a decade. I have just three things to say.

1. Whatever process the data represents made sense up until the mid-1990’s. Since then it doesn’t look there is any kind of consistent trend for more than a few years.
2. Based on this data, it would be rash IMHO to place a bet – perhaps using all the money in one’s pension fund – on the value of the index in (say) 20 years.
3. Shares can go up as well as down. Or up and down as well as down and up. I am not a registered Financial Advisor

What I learned from the Financial Times

Regular readers will know that I am not really a Financial Times type of person, but my favourite cafe in Teddington is Cafe Mimmo. What? Well the food and service at Cafe Mimmo are excellent but they have a choice of just two newspapers: the Daily Mail or the Financial Times. Well, which would you choose?

And to my surprise I have learned that the Financial Times is full of something that many other news papers shy away from: News. Their web site is still open to all, but you do need to register.

So today I read about The Thawing Arctic (free but registration required). The article described the opportunities for business and trade that are likely to open up when [my italics] the summer melting of sea-ice extends further over the coming decades. There was no real discussion about the reality of climate change. They simply showed a graph…

The summer minimum of sea-ice extent in millions of square kilometres versus year. Can you spot the trend? Graph from FT.com and data from NSIDC

…and let their numerate readers draw their own conclusions. This is much more dramatic that the headline graphs at the NSIDC news centre!

Back on August 12th I read,  Doubts raised over UK energy investments (free but registration required), an insightful article reviewing the financial situation of RWE and Eon, and the extent to which the financial returns available to these German companies would affect their choice to invest, or not, in the UK’s energy infrastructure. In my head I had previously imagined that somehow our government made these decisions, but that is not how Financial Times sees it.

And today I read that  Young Britons [are] opting to study sciences which is good news in my book. And I know it must be true because the story is also covered on the BBC who ask inanely:

• Has physics become cool again?

Well as anyone who reads this blog knows, physics has always been cool, and it always will be.

All in all, my perspective on the Financial Times has changed. Although I don’t feel part of the Financial Times ‘tribe’, neither do I feel comfortable as part of any newspaper tribe. But the Financial Times seems to be the only newspaper which is still focussed on reporting ‘actual facts about things that matter’. It’s a novel idea for a newspaper: perhaps it will catch on.