Two years ago this June, I decided the most honest and effective way to help the world invest better was to publicly show how I go about making decisions for my own retirement portfolio. I promised to invest $4,000 in each of 10 companies.
Since then, my original investment of $40,000 has grown to $54,520 — or $2,040 more than if I had just invested the money in the SPDR S&P 500 ETF. Read below to see why the portfolio is doing so well, and how you can find out which of these 10 are great buys right now.
| Company | Publication Date | Change | Vs. S&P 500 |
|---|---|---|---|
| Google Inc (NASDAQ:GOOG) | 6/26/11 | 80.9% | 47 |
| PriceSmart, Inc. (NASDAQ:PSMT) | 6/28/11 | 75.3% | 43 |
| Baidu.com, Inc. (ADR) (NASDAQ:BIDU) ** | 9/15/12 | (12.9%) | (43) |
| Intuitive Surgical (NASDAQ:ISRG) | 7/25/11 | 25.1% | (3) |
| National-Oilwell Varco, Inc. (NYSE:NOV) | 7/28/11 | (12.8%) | (45) |
| The Coca-Cola Company (NYSE:KO) | 6/21/11 | 33.9% | 1 |
| Whole Foods Market, Inc. (NASDAQ:WFM) | 7/5/11 | 69.6% | 41 |
| Amazon.com, Inc. (NASDAQ:AMZN) | 7/12/11 | 23.9% | (7) |
| Apple Inc. (NASDAQ:AAPL) | 6/30/11 | 35.5% | 5 |
| Johnson & Johnson (NYSE:JNJ) | 8/1/11 | 44.6% | 11 |
Source: YCharts. **BIDU replaced ATVI on Sept. 15, 2012. Returns are for the combined positions.
Three big winners
Among these 10 stocks, three stand out as having made significant moves since last month. Whole Foods announced earnings at the beginning of May that wowed Wall Street. Previously, investors had been worried about the company’s declining margins. But management made it clear this was an intentional move to win over market share and make organic food more affordable for more people — thereby increasing the overall market as well.
Based on results from the first three months of 2013, those moves are paying off. Though other grocers can now compete on price, Whole Foods Market, Inc. (NASDAQ:WFM) was still able to bump comparative store sales up 6.9%. And though it might seem like a grocer valued at 38 times earnings is ridiculous, it’s important to remember that Whole Foods has built only about one-third of the total stores it believes it can have in the United States.
But perhaps most interesting of the five product announcements was that Google Inc (NASDAQ:GOOG) search now has voice input — something that management believes could be a huge differentiator moving forward.
The final big mover of the month was Chinese search giant Baidu.com, Inc. (ADR) (NASDAQ:BIDU). As with Google Inc (NASDAQ:GOOG), it wasn’t any earnings announcement that moved the stock’s needle. Instead, it was optimism bubbling over when rival Qihoo 360 released its earnings.
Although Qihoo has apparently captured 5% more of the Chinese search market — bringing its total to 15% — it was pretty clear that Qihoo isn’t making nearly as much money from its advertising as Baidu.com, Inc. (ADR) (NASDAQ:BIDU) is. That speaks to the fact that companies in China are willing to pay up to have their ads hosted with Baidu.
Two other big developments
Two other developments of note occurred for the portfolio in May. First, Intuitive Surgical, Inc. (NASDAQ:ISRG) won a major lawsuit last week. The defendant had claimed that the company was liable for not training a surgeon properly when complications arose from a da Vinci procedure. The jury found that the fault lied with the surgeon, who had been repeatedly warned not to operate on obese patients until he became more familiar with da Vinci.
The second development was my announcement that The Coca-Cola Company (NYSE:KO) would be leaving the portfolio soon — not because it represents a poor investment, but because I have trouble holding the company, knowing that I’ll be profiting from unhealthy products that I don’t use.
At some point in June, I will be announcing the company that will be taking Coca-Cola’s place.
What are the best buys?
Every month, I pick out three stocks that are the best buys from this group of 10. Keep your eyes open next week, when I’ll tell you what those three stocks are.
The article Why “The World’s Greatest Retirement Portfolio” Continues to Outperform the Market originally appeared on Fool.com and is written by Brian Stoffel.
Fool contributor Brian Stoffel owns shares of Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), The Coca-Cola Company (NYSE:KO), Johnson & Johnson (NYSE:JNJ), Amazon.com, Inc. (NASDAQ:AMZN), Baidu.com, Inc. (ADR) (NASDAQ:BIDU), National-Oilwell Varco, Inc. (NYSE:NOV), Whole Foods Market (NASDAQ:WFM), Intuitive Surgical, and PriceSmart, Inc. (NASDAQ:PSMT). The Motley Fool recommends Amazon.com, Apple, Baidu, Coca-Cola, Google, Intuitive Surgical, Johnson & Johnson, National Oilwell Varco, PriceSmart, and Whole Foods Market. The Motley Fool owns shares of Amazon.com, Apple, Baidu, Google, Intuitive Surgical, Johnson & Johnson, National Oilwell Varco, and Whole Foods Market.
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