Mr Hendy was stabbed in the back and in the neck
A 75-year-old man, from Greenbank, Bristol, was stabbed to death by a man who "was not suffering from a disease of the mind", a court was told.
Stephen Newton stabbed Philip Hendy and then told police he was the love child of the Prince of Wales, the jury heard.
Mr Hendy died less than a month after the attack in April 2007.
Mr Newton, of Carlyle Road, Greenbank, denies murder and claims he cannot be held responsible as he was suffering from mental illness at the time.
Bristol Crown Court was told Mr Newton had taken amphetamines and waited outside A and J News in Greenbank Road, Easton, for Mr Hendy to leave.
Mr Newton then followed Mr Hendy and stabbed him twice in the back and neck with a kitchen knife on 29 April 2007.
A short time after the stabbing Mr Newton followed Hargouindbhai Taylor, 84, on Spencer Park Road, and punched him twice after asking him the time.
After his arrest Mr Newton spent several hours telling police his conspiracy theories.
Stephen Mooney, prosecuting, told the jury that they would be asked to decide not whether Mr Newton killed Mr Hendy but whether he knew what he was doing at the time.
"The defendant asserts that he does not suffer full criminal liability for his actions because he was suffering from an acute paranoid psychosis brought on by the consumption of substantial quantities of amphetamine.
"It is the Crown's case that this defendant was not suffering from a disease of the mind and should be found guilty of murder.
"He killed Mr Hendy because he took the decision to take amphetamine knowing that when he was under their influence his decisions and thought processes were impaired.
"He is fully responsible for Mr Hendy's death morally and legally."
The case at Bristol Crown Court continues.