Pawnbroking isn’t a bad idea in these straitened times – and this company is doing it right

Jesse Livermore is best known as a fearless stock market trader in the US in the early part of the 20th century (and for making an absolute packet by going short into the Wall

Street Crash of October 1929), but his career also shows the value of patience. One Livermore maxim is that “there are times to go long, times to be short and times to go fishing”

and sometimes the power of doing nothing is underestimated. This column is not afraid to admit that taking a particularly strong view on the direction of the markets is far

from easy right now, given the number of cross‑currents and contradictory signals in evidence, in terms of both company commentary and economic data. However, one thing does seem

clear: leadership is changing. Since the markets bottomed in early October, the worst performers, namely China and Hong Kong, are the best, and the best performers, India

and Brazil, are just about the worst. The FTSE 250 is now outpacing the FTSE 100 and in America the older‑world Dow Jones is beating the tech‑laden Nasdaq. The unloved

London market is putting on a bit of a run, too, and its run is giving this column the courage of its convictions that British shares are cheap. That said, chasing stocks that

have just surged is not always a smart thing to do and, to take Livermore’s observation to heart, we will this week prefer to stick with two earlier picks that still look good

value, rather than go searching for anything new. Valuation is the ultimate arbiter of investment returns, after all.