Trustnet Magazine 63 June 2020 | Page 11

[ 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 trustnet.com