Tired of raids by local bandits, the farmers of a poor Mexican village hire a group of gunslingers from across the US border to protect them. So goes the plot of the 1960 movie classic, The Magnificent Seven.Last year, the same epithet was attributed to the seven stocks that produced most of the growth in global equity markets. They, too, offered protection — to savers seeing their wealth ravaged by inflation. But are they up to the job longer term? And how might this story end?

Investors love catchphrases for stocks and markets on fire. Around the time The Magnificent Seven was pulling in cinema crowds, markets were being led by what became known as the “Nifty Fifty”. Many of these were growth stocks, including the hot technology businesses of the day — Xerox, IBM and Texas Instruments — while others belonged to consumer companies such as Coca-Cola and Procter & Gamble.

Investors saw the group as an easy and reliable list of “going-up stocks”. They were so good that “nothing bad could happen to them”. And that meant no price was considered too high to pay for them. By the early 1970s, the average price/earnings ratio multiple had reached 50x — not-so-nifty!