After the storm: how to find top stocks amid the ruins

Investors are caught in a topsy-turvy world, says Jonathan Compton. He surveys the scene, assesses the outlook and suggests where – and how – you should look for healthy returns.

The world has gone mad. Unless restrictions are lifted immediately the global airline industry is facing bankruptcy within months at most. So too are many major companies in other sectors. The global cruise industry is now notorious for imprisoning its passengers on “plague ships”. Cinema chains worldwide have been forced to close. Hotel chains are suffering in a similar fashion as leisure travel collapses.

These bankruptcies may be just the first dominoes in a long row. Keep an eye out for construction groups, carmakers and nail bars after that. It is not out of sympathy for the three million-plus employees already furloughed that the UK and other governments have rapidly shaken every old and new money tree they could find, but out of necessity. If these businesses were to close for good, their bad debts would sink other businesses and every financial institution.

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Jonathan Compton was MD at Bedlam Asset Management and has spent 30 years in fund management, stockbroking and corporate finance.