We have come to the end of our Era

In a little more than a year the no pain, no gain portfolio has grown to 15 shares; 10 are recording gains, with the rest, sadly, looking forlorn and, at the moment, unwanted.

In a little more than a year the no pain, no gain portfolio has grown to 15 shares; 10 are recording gains, with the rest, sadly, looking forlorn and, at the moment, unwanted.

The winners are a mixture of the old and new economies with spirits group Allied Domecq, one of my first selections, and recent choice, the Lynx computer group, among the successes.

The fallen constituents are all associated with the more old-fashioned elements of our commercial life but, like most, they are quite capable of reapingrich rewards from thehigh-tech revolution.

During the portfolio's existence, shares have had a mixed time, with the whizzbang creations of this internet age often surging into the stratosphere while the old world, whereprofits are made and dividends paid, has been in ragged retreat.

As measured by the leading indices the year or so since the portfolio was launched has been a happy one for the stock market. Footsie has climbed from 6,078 points, hitting a 6,950.6 peak at the turn of the millennium and rising above 6,700 this week. The mid-cap index has also made heady progress but it is down among the the small fry where real money hasbeen made.

Small-caps were for long deep in the doldrums but brave and determined small investors piling into high-tech shares have had a dramatic impact, the small-cap index climbing from just below 2,200 to a 3,565 peak earlier this month. In a sense, the high-tech revolution has distorted the indices. After all, investors in old-economy shares, such as fallen blue chips Scottish & Newcastle or Thames Water, must blink in astonishment at the overall Footsie performance.

Their appalling display finally caught up with them when they were among the nine old-economy shares unceremoniously relegated from Footsie on Mondaylast week.

But the stock market is a perverse place. Even before the nine were dumped, a subtle change of mood was beginning to make itselffelt, prompting a littlemore interest in old-economy shares.

Perhaps, significantly, the high-tech Footsie recruits have not exactly dazzled since their elevation to blue chip status, and the victims of their success have started to turned in more solid performances.

I believe the lopsided stock market we have experienced in recent times will come to its senses. The pendulum invariably swings too far and the absurd low ratings accorded highly successful but old-established companies suggests their futures are behind them.

And, by the same token, there was little rhyme or reason to the highly inflated levels given to companies which may, in the distant future, start rewarding their shareholders.

Some of the high-tech companies should have sparkling futures. But there are going to be many, many casualties. The indiscriminate way some investors piled into anything with a hint of the new world is a sure recipe for depleted wallets and tears of despair.

I am happy with the portfolio's two high-tech shares, City of London and Lynx, although they are off their highs. In sad contrast, Era, the retailer, is causing concern, and I have reluctantly come to the view that discretion is the better part of valour. The shares should be dumped, after this week's announcement that it has put its Beatties toy subsidiary into administration. This effectively pushed the shares down to 2.75p.

The other loss makers should, of course, be monitored closely. I have hopes that Safeway is over the worst and the others, I feel, are merely suffering from lack of interest. Perhaps S&U, the finance house, will enliven proceedings with figures next month.