[ BOMBED-OUT STOCKS ]
essons from history
of the shareholder towards
something that looks more
like ‘stakeholder capitalism’,
where businesses’ impact
on society is under the
spotlight,” he explains.
“As we’ve seen from the
performance of the banks,
being caught on the wrong
side of the political and
social mood after a crisis
can cast a long shadow.
That’s something to think
about in this environment.”
Coombs says another
example came after the
bursting of the dotcom
bubble: “You had big falls
and people were trying
to catch the falling knife.
Everyone thought stocks
like Marconi and Worldcom
were blue chips, so when
they went 40 per cent lower,
we all piled in. Then they
disappeared altogether.”
Of course, while the tech
sector dragged down
the global market for 10
years after the turn of the
millennium, it eventually
recovered and drove the
longest bull run in history.
Yet of the hundreds of tech
stocks that collapsed when
the dotcom bubble burst,
just a handful of survivors
– along with new entrants
into the market – were
responsible for the rebound
and extended rally in the
sector.
PERFORMANCE OF STOCKS OVER 15YRS
Royal Bank of Scotland
Group (-96.63%)
Lloyds Banking Group
(-46.31%)
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
Jun05
Jun07
Jun09
Jun11
Jun13
Jun15
Jun17
Jun19
Source: FE Analytics
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