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COMMENT
The FTSE All-Share has surged 75% since the bear-market low of March 2003. Such a performance over such a sustained period of time (33 months) tells me this is no suckers' rally. We're now in a fully fledged bull run. Everybody still remembers the Nineties bull charge, where buyers progressively paid higher and higher prices to get involved. ARM (LSE: ARM) at £10 a share, British Sky Broadcasting (LSE: BSY) at £21, Cable & Wireless (LSE: CW.) at £15 and Sage (LSE: SGE) at £10 -- those sort of prices returned gains of 1,000% or more to those who spotted the early 'new economy' potential. However, with their earnings never living up to the wild expectations of the past, I feel ARM, Sky and so on are unlikely to capture the imagination of investors this time around.
A rising market bodes well for growth shares. Long forgotten as investors retreated to 'value', companies reporting above-average earnings momentum are well overdue a stint in the spotlight. In particular, I reckon new, youthful companies will become your next bull market leaders. Let me explain why.
However, there's no history to stop new companies from becoming market darlings in this emerging bull run. You see, fresh shares joining the stock market typically have no record of a prior setback. Thus if these companies perform well after listing, there's little to keep shareholder reality in check. Investors are therefore free to extrapolate earnings all they want -- just like they did with ARM and the rest. As this market continues to rise, it is today's new growth shares that are most likely to be pushed to ridiculous heights.
Within Champion Shares, I have recommended three new companies that have joined the market in the past year or so. Each has an appealing growth story to tell. One looks set to benefit from favourable rule changes within its sector, one has an exciting roll-out concept and one is an emerging player in the consolidating telecom industry. All three have the prospect of superior sales and earnings growth and have no prior disappointments to restrain investor enthusiasm. I believe these three shares will be among the leaders of this new bull market -- this free 30-day trial to Champion Shares reveals their identities.
