2 Stocks to Buy Now From This Market-Beating Retirement Portfolio

In the summer of 2011, I decided that, instead of just telling investors what I thought were the best stocks to buy, I'd back up my choices by putting my money where my mouth was. I chose 10 stocks, invested $40,000 of my retirement money, and attempted to hold these companies for at least three years.

In that time, the original $40,000 investment has ballooned to $62,760. The portfolio is outperforming the S&P 500 -- including dividends -- by 15.6 percentage points. This means it has earned $6,240 more than it would have had it just been invested in the larger market.

You can see below why the portfolio is doing so well, and also find out what two companies I've identified as stocks to buy now.

Note that BIDU replaced ATVI on 9/15/12, and SBUX replaced KO on 11/5/13. All returns have factored in transitioning from one stock to another.

Earnings season winners
Four stocks in this portfolio have seen their prices rise markedly since last month. PriceSmart, a Latin American wholesaler, saw shares surge on earnings that revealed a 9.3% surge in comparable-store sales. More important to investors, management hinted at opening a fourth store in Colombia -- this time, in the capital city of Bogota.

Google continues to wow Wall Street with its ability to increase advertising revenue. Though advertisers paid 8% less for each ad displayed -- a continuing trend -- the total number of ads clicked increased a whopping 25%. That's incredible, and it shows how effective the company's mobile strategy has been.

Amazon also experienced a nice 9% jump after reporting earnings. The company's revenue increased by 24%- -- impressive given Amazon's size. For comparison's sake, Wal-Mart and Target showed revenue increases of just 2.3% and 4%, respectively, in their most recent earnings announcements.

And though investors didn't bid up Apple shares after learning that the company sold 24% more iPhones than a year ago, shares are trading 6.5% higher than they were just one month ago.

Virtually the only company to disappoint investors was Whole Foods -- and that had more to do with lofty expectations than with a failure to execute. The grocer announced comparable store sales of 5.9%- -- impressive for most in the industry, but low by Whole Foods' standards. That, plus lowered guidance, helped cut 10% off shares today.

This month's two best buys
Though Whole Foods is trading at a significant discount today compared to where it was just one week ago, it didn't make the cut for "best stocks to buy now." Instead, that honor goes to the two dominant search engines in this portfolio: Google and Baidu.

Take a look at a few metrics, and you'll see that, though neither stock is cheap, neither is outrageously priced either.

Source: SEC filings, E*Trade, Yahoo! Finance. Revenue growth is annualized.

Both of these companies combine the unique combination of very large moats, rapidly growing revenues, and cultures of innovation.

Google, which controls 71% of the worldwide search market share, doesn't have any serious threats to its dominance North and South America, as well as Europe. Baidu is second worldwide, but more importantly, commands 63% of the world's largest Internet market: China.

Both companies aren't resting on their laurels, either. They are forgoing short-term profits by investing heavily in mobile monetization. And at Google, a new segment that includes things like Google Apps, as well as Google Play, has grown by leaps and bounds, and now accounts for 8% of all revenues.

Long-term, I don't think investors can go wrong adding these fairly priced stocks in a relatively expensive market.

Want to win in China?