The Tesco (LSE: TSCO) share price didn’t do much on Thursday morning (9 January), after the supermarket giant posted a strong trading update for the festive season.

That’s despite CEO Ken Murphy telling us that “we delivered our biggest ever Christmas, with continued market share growth and switching gains.”

He went on to describe Tesco as “the UK’s cheapest full-line grocer for over two years.”

Market share

The third quarter to 23 November, saw a 2.8% rise in total like-for-like sales. And then a bumper 3.8% Christmas lift pushed sales up 3.1% overall for the combined 19-week period.

Perhaps more importantly for the long term, the company said it hit its highest market share since 2016.

Kantar Worldpanel gives Tesco 28.5% of British market share as of 29 December. It’s edged up 1.2 percentage points in the past five years. Aldi and Lidl also gained over the same period, with Asda and Morrisons losing out.

The threat from the cheapies isn’t over. But they haven’t made the inroads that Tesco shareholders might have feared. And we’ve had a tough inflationary time for shoppers too, when the ‘pile it high, sell it cheap’ retailers should have enjoyed an advantage.

Cracking two years

Is the subdued market reaction on the day a surprise or a disappointment? No, I don’t think so, not looking at the recent past. The Tesco share price is already up 19% in the past 12 months, and 47% over two years.

It looks like the 2024-25 year is going in line with forecasts. So this healthy trading was largely expected. Much of the optimism will have already been built in to the share price. And it’s likely that some investors will have been taking some profit off the table.

For the full year, Tesco expects to see around £2.9bn in retail adjusted operating profit. And retail free cash flow should be within the range of £1.4bn to £1.8bn.

Finest

Tesco’s success in the past couple of years has to be down to its two-pronged attack on its rivals.

At one end of the scale, the latest update spoke of a “traditional Christmas dinner available at a 12% lower price year on year.” And that’s got to be the way to lure customers away from Aldi and Lidl.

And the company also reported a 15.5% rise in sales of Finest brand products, taking the challenge to its traditionally more upmarket rivals like Waitrose and J Sainsbury.

What it means

Forecasts put Tesco shares on a full-year price-to-earnings ratio of close to 14. For my money, I think that would probably price the stock about right, with a modest forecast dividend yield of 3.4%.

I might buy Tesco some day. But this year, I’ll be aiming for bigger FTSE 100 dividends.

Still, looking at the Tesco share price history of the past two years, buying sector leaders when their prices are down has to be a strategy worth considering for long-term investors, doesn’t it?

Are investment trusts the best thing ever? They might be.

Here are five I think anyone starting a Stocks and Shares ISA in 2025 could do well to consider. I already bought two of them myself.

The key attractions for me? An investment trust can provide diversification in just a single purchase. And we have a whole range of investing strategies to choose from.

Five top trusts

I’d challenge anyone to pick five stocks for a new ISA that can equal this lot for diversification — in both industries and global spread.

The first thing I note is that Premium/discount column. A negative number means a stock is selling for less than the net asset value (NAV) of the things it invests in.

On that score, these look cheap. But a discount also reflects the risk that the market sees in an investment trust.

Cheap vs risky

Look at Scottish Mortgage Investment Trust. The risk comes from the stocks it puts its shareholders’ money in. We’re talking high-flying Nasdaq stocks here — the so-called Magnificent 7 of artificial intelligence (AI), and the rest.

Scottish Mortgage holds Amazon, Nvidia, Tesla… and a few analysts are calling an AI bubble right now.

The Nasdaq has even been easing a bit after hitting an all-time high in September. But I think it’s way too early to give up on world-leading tech stocks, at least with my investing horizon of at least five years.

With that outlook in mind, I think the 12% discount has to make Scottish Mortgage a worthwhile consideration for those who want a more diversified tech growth investment.

Better bargain

Bankers Investment Trust is on a similar discount, with investments in some of the same Nasdaq stocks. But its also holds stocks like Visa and Chevron. It looks less exposed to tech stock risk to me. And I wonder if it might be an underpriced anomaly. I need to dig deeper.

I’m also surprised by the difference in discounts between City of London and Murray Income Trust. They’re very similar in their strategies, dividends, and holdings. Both include Unilever, AstraZeneca, and RELX in their top 10, plus other top FTSE 100 shares.

I wonder if the fact that Murray Income is managed by abrdn might have anything to do with it? That company is out of favour with investors, down 20% in the past 12 months. Again, more research needed.

Good mix

These trusts I’ve looked at have all raised their annual dividends for many years. If any should falter one year, that’s a share price risk (on top of any specific strategy risk).

But looking at the current discounts, there’s a very good chance I’ll add another of these five to my 2025 ISA.

MicroStrategy (NASDAQ:MSTR) is a growth stock with an unusual history. It started life as a software company but in late 2020, it began buying cryptocurrency as a means of shoring up its balance sheet. It now claims to be the “largest corporate holder of Bitcoin in the world”.

And it appears to have caught the attention of many investors on both sides of the Atlantic.

Of the 11 US analysts covering the company, 10 consider it a Buy.

Closer to home, during the week ended 3 January, it was the most popular stock with Hargreaves Lansdown’s clients. Of all that week’s purchases on the platform, MicroStrategy saw the most activity, both in terms of trades (3.21%) and the value of deals placed (5.04%).

An extended bull run

Not surprisingly, this interest has helped drive its price higher.

Since January 2024, it’s increased by 470%.

And this impressive performance shows no signs of slowing down. Helped by the prospect of a second Trump presidency (he’s seen as being more pro-crypto than Joe Biden) during the first eight days of 2025, the stock’s up 18%. Past performance is not an indicator of future performance though, of course.

But a closer look at the statistics is revealing.

Although it was the post-Christmas number one with Hargreaves Lansdown’s buyers, it was also popular with sellers, accounting for 4.55% of all trades.

This could be a sign that the stock’s being bought with a view to making a quick profit, rather than for its long-term growth prospects.

It might also explain why it’s the most volatile stock on the S&P 500. Although its done well in 2025, I think it’s worth noting that it’s fallen 28% from its November 2024 peak.

Looking to the future

But the company does have a growth strategy, albeit a simple one. It plans to buy more Bitcoin, and lots of it.

Over the next three years, it hopes to purchase $42bn of the digital asset.

However, given that MicroStrategy’s software business isn’t cash generative — during the nine months ended 30 September 2024, it reported a post-tax loss of $48m — all of the funds will have to come from a combination of debt ($21bn) and equity ($21bn).

And as long as Bitcoin doesn’t crash, I’m sure everything will be okay. Otherwise, I fear it’ll be catastrophic for the company and its shareholders.

The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Leverage

Latest reports suggest that the company currently owns 447,470 Bitcoin, worth approximately $43bn. Its market cap is $84bn — 95% higher.

In other words, investors are happy to pay more for the Bitcoin held by MicroStrategy than if they bought it directly themselves.

To my surprise, this means its share price has outperformed the value of the cryptocurrency over the past 12 months by a factor of four.  

This doesn’t appear sustainable to me.

And it suggests that if the value of Bitcoin falls, the stock market valuation of MicroStrategy will crash by a lot more.

Personally, I don’t want to add this level of risk (or volatility) to my share portfolio. I’m therefore going to steer clear of MicroStrategy, despite the hype surrounding the stock.