Information-driven society

The advent of computers have had far reaching effects on the investing community. World stock markets have long been driven by a need for more and more information, both on the companies listed on the exchange as well as local and world events that could effect the price of the socks.

Carrier pigeons were one of the first tools used to speed up the flow of information and enable investors with access to this more up-to-date information to make money at the expense of those with less up-to-date information.

The advent of the telegraph service and intercontinental telegraph links and ticker tapes were the beginning of an efficient use by financiers of latest technology to aid them in their quest for better returns on their investments.

Banks, Stock Exchanges, Fund Managers; etc, have relied heavily in the last decade on computers to help them make the right decisions, quickly and based on accurate data. Not only this, but computers have aided them in their administration and freed them to concentrate more time on research and investing issues. This has enabled them to grow the size of the their organizations and control larger portfolios.

Today it is unthinkable for a stock broker or fund manager to be without a computer or terminal on his desk giving him access to some form of electronic information relating to his field of expertise be it comparative graphs of share movements, real-time Futures information or the latest world news. It is all available at the press of a button.

Information gathering with technology

Developments over the last few years have meant that this kind of technology is also available to private investors. You don't have to be computer literate (you don't even have to own a computer!) to gain access to the wealth of information that is available.

In the following section, we shall concentrate purely on the South African situation and the various options and services that are available to investors in this country.

The South African alternatives

The advent of Beltel in South Africa opened up a new medium for the dissemination of a wide variety of information to the general public and companies alike. Beltel provides a low-cost nationwide infrastructure which can be dialed into with a toll free phone call.

All you need is a computer, equipped with a modem, or a terminal can be rented directly from Telkom on a monthly basis. The costs are essentially very low for the services it can open up to you, such as: being able to view your bank statements and transfer funds all from home or work, view prices of new or second-hand cars, view aircraft timetables, exchange rates, fresh produce prices, send gifts or as is relevant to the subject of this chapter obtain local financial information such as JSE share prices, Unit Trust prices and investment advisory and commentary services or even worldwide financial information from the major stock markets.

The service most widely used by private investors is that of downloading closing prices every evening onto a PC and then automatically updating a graphics program or technical analysis system. Many years ago the only way to plot a graph of the movement of a share was to use pen and graph paper and actually plot each point day by day to form a graph.

Then once the decision has been made to buy or sell, keeping track of performance on a daily basis becomes important. The latest JSE prices are available electronically via a variety of systems and there are even services that make it affordable for private investors to be able to keep a watchful eye on prices on an hourly delayed or four times a day basis.

Advisory services and market commentaries are also available, provided by information supplies, brokers and analysis. This allows one to keep abreast of the latest events and estimate what other people are thinking about market conditions and specifics shares.


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