The composition of the world’s stock exchanges is in a state of perpetual flux. Companies that once were household names and industries that were pre-eminent have vanished from public consciousness. Given the rapid advances in technology, can we expect today’s stock market titans to last forever?

In the 1800s canal stocks were in fashion.  However, the railways quickly rendered canals redundant leaving shareholders a lot poorer.

The technology, media and telecoms [TMT] sector is a more recent example of overly optimistic investors assuming the sun would never set on a fashionable area of the market. TMT peaked at 32% of UK market capitalisation in 2000 but troughed in 2002 at 12%.

In 2008 there was much talk globally of the ‘mining supercycle’ with the laws of economics apparently suspended for this sector. They were not suspended for long and having peaked at 10% of market capitalisation, today the stocks are at less than half that figure.

IN 2007, the banks peaked at 12% of global markets as we all confidently asserted that our clever spreading of risk around the financial system would make it “different this time”. It wasn’t different and bank shares halved in value.

The recent difficulties of Facebook are an interesting case. It has almost 2 billion users, each spending almost an hour a day communicating with each other. Can people really spend more time on the site? Is there anyone left to join up? Is Facebook a publisher with responsibilities and a consequent requirement for regulation? Governments thinks so and shareholders need to be wary.

The broader US technology sector seems otherwise unassailable with champions such as Apple, Amazon and Microsoft, all fine companies with strong balance sheets and inspired leadership.

But what happened to Yahoo, IBM and Blackberry?

The world was their oyster but they took some wrong turns and lost their customers.

The lessons from the history of investing are clear and as we are often warned, the past performance of investments is no guide to future performance. Investors ignore such lessons at their peril.