Introducing the "One Person's Trash Is Another Person's Treasure" Portfolio

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We at The Motley Fool have quite the "motley" of investing opinions with regard to what the best path to retirement entails. Some of us enjoy owning strong brand-name, high-growth companies, such as my Foolish colleague Brian Stoffel, who has put real money behind each of his selections in the "World's Greatest Retirement Portfolio." For my other Foolish colleague Jim Royal, it's all about the dividends. Jim has placed his hard-earned cash behind a growing list of high-yielding companies in a portfolio that he refers to as the "World's Best Dividend Portfolio."

The one unifying factor you'll notice across the board among the multiple real-money and tracking portfolios my colleagues manage is that we're all Fools investing in businesses, not tickers, with an emphasis on the long term. We also believe in transparency and being accountable for our track record, as has been a key point made on multiple occasions by Foolish co-founder David Gardner.

That's why, today, I'm announcing my intention to roll out my own tracking portfolio known as the "One Person's Trash Is Another Person's Treasure" portfolio.

What its focus will be
Just as the name implies, I plan to focus on what I perceive to be my strengths as an investor, which are locating deep -alue, contrarian picks that many investors have written off for dead. It's true that many underperforming companies are down for very good reasons, but it's my assertion that many gems can be unearthed from the growing number of downtrodden companies cast off by impatient traders.

Beginning next week, and continuing each week for a total of 10 weeks, I plan to unveil one company that's been stomped on by investors that I feel has all of the tools necessary to turn its business around. The 10 companies I've chosen come from a number of different sectors, pose varying degrees of risk, and will range from small- to large-cap companies.

How I'll track my performance
Unlike Brian or Jim, I won't be backing up these selections with my own money; however, that doesn't completely preclude me from buying into my selections at a later date as The Motley Fool's disclosure policy permits.

Instead, I plan to create a fictitious $10,000 starting portfolio, with approximately $1,000 being apportioned to each company chosen. I do plan to factor in one-time commission costs, as well as dividend payments received, and will track the portfolio against the performance of the broad-based S&P 500 (INDEX: ^GSPC  ) . Once all 10 of my selections have been made public, I will initiate the tracking portfolio and update its performance, as well as any pertinent news from those companies, on a weekly basis over the course of a year.

What I hope to accomplish
First and foremost, like every preceding portfolio, I hope to vastly outperform the S&P 500 and prove that hidden gems can indeed be unearthed in the scraps often thrown out by careless traders.

More than that, I hope to shed light on the proven success of value-investing and contrarian investing. Value investing involves more than just examining a balance sheet and looking for extremely low or high numbers. Similarly, contrarian investing involves more than just disagreeing with a consensus opinion. What I intend to do is dig deep to find fundamentally sound businesses, at deep discounts to their peers, that have a discernible negative bias from investors, and that should produce jaw-dropping returns relative to the S&P 500. The results will hopefully encourage you to broaden the scope of the companies you research, have you focusing less on short-term results and more on the long-term businesses themselves, and demonstrate that it's OK, and sometimes very profitable, to disagree with the consensus.

I look forward to introducing my first selection to the "One Person's Trash Is Another Person's Treasure" portfolio next week. In the meantime, you can click here to grab your copy of our latest special report that highlights three companies that'll help you build a smart, long-term-oriented portfolio, and help you retire rich.

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