It’s no secret that stock markets are cyclical, swinging from bullish to bearish and back again as investor sentiment oscillates between greed and fear .

This happens at a micro level intraday, and at the macro level overtime scales of years ,or even decades .

What isn’t always appreciated is that markets are also prone to fashions. And here we are not talking about the participants sartorial choices.

Although they probably say al lot about crowd behaviour and bias (Next time you are in the City of London count the number of people in gillet’s and or quarter zip jumpers you see)

In this case I am talking about fashions in stock selection and asset allocation – simply put some stocks and sectors are in vouge whilst others are seen as being old hat.

Nokia was once the largest company in Europe and amongst the most actively trader stocks on global basis. However the emergence of the smart phone and a 180 degree swing in consumer preferences led to its demise.

But it could be back in fashion, thanks to a billion dollar investment from Nvidia and a plan to reinvent the company as provider of AI powered telecom networking equipment.

Another fallen (European) giant is Philips PHIA NA to my mind the company is a perpetual disappointment, with too many false starts behind it. However, more recently it has been making bullish noises , see the lower window on the chart below.

Currently trading at €25.85 it traded at €50.98, back April 2021.

That’s the reason that I keep an eye on stocks like this . You might think that recovery of that magnitude is unlikely,

Then again, did you think it likely that young men would start wearing trousers that are 6 inches too short as a fashion statement?