The number of exciting, explosively growing companies in the world is incredible. I have been investing and writing about investing for a long time and I have never seen anything remotely like the present period. As I noted in the last issue you can build a portfolio of 100 shares in today’s stock markets and every single one will be a star performer. Indeed, I strongly recommend subscribers to build exactly such a portfolio. The trick to doing this incidentally is just to buy the good ones. If you read the newspapers, which I mostly don’t, especially the financial pages, they are always worried about values being too high, bubbles, short-term negative factors, which happen to be in the news at the time, you can become drawn into their world of worry.  Don’t be.

In the last issue of Chart Breakout, as the full fury of the Covid-19 pandemic and its likely consequences for the world economy were becoming apparent I wrote “that it would be crazy to make any share recommendations when there are no chart buy signals and we are facing a global pandemic”. 

Global and most noticeably US stocks markets have become bipolar in the V-shaped recovery from the pandemic inspired lows. On the up we have technology shares, health care shares and shares, often from these two sectors, which are positively benefiting from the stay home economy. Initially investors saw the stay home effect as being short-lived. As they increasingly suspect that some aspects of a stay home economy may lead to permanent changes in behaviour they are becoming more interested in businesses, which benefit.

Years ago as a student at Oxford I read a book called ‘The strange death of Liberal England’, which was about the sudden fading of the erstwhile all-conquering Liberal party and its replacement by Labour. Something similar seems to be happening to the UK stock market, which seems to be going in the European direction of stagnant irrelevance.

The main reason why active investors don’t make as much money in the stock market as they should is because they sell too early.  Way back in the day, when I was the editor of The Investor’s Chronicle Stockmarket Letter and houses cost less than cars cost now, I noticed a common feature of people who made a fortune in the stock market. They bought shares in a great growth stock and held them forever.