The Lessons to Be Learned From Keeping Score

As earnings season draws to a close, I take a look at where the Father's Day Portfolio stands eight months since its inception.

Feb 17, 2014 at 6:30PM

As earnings season wraps up, I always like combing through my ideas to see which ones are working out and which ones still have some work to do. While I tend to invest with a three- to five-year timeline in mind, things can change quickly in the market these days, so it helps to check in every once in a while.

Portfolio management
In June 2013, I put together a portfolio of 10 stocks with the ultimate goal of beating the market over the long haul. I coined it the "Father's Day Portfolio," and you can see the holdings and learn more about it here. Given that we're about eight months in, I figured now is as good a time as any to take a gander.

I'm still winning
Of the 10 stocks I picked, nine are showing positive returns today, and the one that is actually losing is only down by 0.1% (it's OK Ford, I won't hold it against you). Of course, the market had a phenomenal 2013, so it's only natural to expect 2014 to be a bit tamer. When pitting each one versus the market, six are outperforming, and four are underperforming. Yep, right in line with Peter Lynch's old axiom: "In this business, if you're good, you're right six times out of 10. You're never going to be right nine times out of 10."

The top performer this go-round is St. Jude Medical (NYSE:STJ), beating the market by 34 percentage points, and the laggard of the bunch is Ford (NYSE:F), which is losing to the market by 13.7 percentage points. In total, based on a hypothetical $1,000 invested in each stock along with a matching position in the S&P 500, the Father's Day Portfolio has returned 19.7% versus the market's 13.7%.

The prescription for profits
I originally recommended St. Jude Medical a while back in my real-money portfolio I ran here at the Fool for a couple of years. And though I closed that down because of time constraints, St. Jude has remained on my radar. I like the company thanks to its diverse product mix that covers everything from heart devices and strokes, to Parkinson's and migraines.

While the market has cheered on a fourth quarter that beat expectations all the way around, it's not so much about what the company did then as much as what it's doing now. Clinical research continues for the Nanostim Leadless pacemaker, which, while it has yet to gain FDA approval, was recently implanted in its first patient. The implications of a non-surgical pacemaker are exciting to consider, and St. Jude is leading the way with its phenomenal medical technology.

A long drive ahead
Ford, Ford, Ford... what am I going to do with you? Actually, I can't complain at all about what Ford the business continues to do. With a great fourth quarter in the books and what looks like a solid start to the new year, Alan Mulally has the business firing on all cylinders. And while he won't be there forever, I do believe he has implemented a badly needed culture shift at Ford that should continue to pay dividends once he does leave.

Speaking of dividends, the company doubled its dividend in 2013 and hit a number of milestones in the fourth quarter worth mentioning, including: its 18th consecutive profitable quarter, year-over-year top line growth for the fifth consecutive quarter, and a record 4.4% market share in China. Cars are not an easy business, but I still like the idea of having Ford in the portfolio for the long haul.

The Foolish bottom line
There aren't really any long-term lessons to gain from a portfolio that's only eight months old. Things can and do change quickly, and what's here today can be gone tomorrow. But I'm also a big believer in knowing what you own. And in this case, while the Father's Day portfolio isn't a real-money portfolio, it is one I'm intent on keeping track of indefinitely. Remember, there are lessons to be learned in every investment you make and every stock you pick. All you have to do is keep score.

Six stocks for ultimate growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Jason Moser has no position in any stocks mentioned. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers