The $99 Portfolio

How far will $99 take you?

That was the question I posed three years ago, when I created a mock portfolio consisting of a single share of several stocks. The only stipulation was that the sum of those single shares couldn't add up to more than $99.

The concept proved so popular that I received several reader submissions. Fool Stephen Simpson even created a biotech version a month later.

I'm ashamed to say that I hadn't checked on my original $99 portfolio until this morning. The results surprised me.

*Acquired by Microsoft (NASDAQ:MSFT) last year.

An 85% return over a 31-month period is nothing to sneeze at, especially these 31 months, where the rocky S&P 500 index has come though with a mere 17% return.  

Yes, aQuantive being acquired for $66.50 a share last year accounted for more than half of my gain. It certainly didn't hurt that the two sinkers in my half-dozen picks also happened to be the lowest-priced selections, although I should point out that my highest-priced pick weighed down my overall return by failing to keep up with the market.

Before dusting off this concept again -- and giving you another crack at it -- I figured I would go over what worked and what didn't work.

$99 can go a long way 
Akamai has been a wild ride. Sixteen months after kicking off my mock portfolio, the stock peaked at $59.69. It seemed like every Web giant wanted to deliver digital content faster and more securely, and Akamai's server farm was at the right place, at the right time. Akamai continues to grow, but a more cutthroat climate has nibbled away at those head-turning gains. I certainly won't look a 147% return in the mouth, though I wish I was looking at a little less plaque and gingivitis these days.

Netflix, the only stock of the six that I own in the real world, has been on a roller-coaster ride befitting some of the thrillers in its growing movie collection. The mail-based DVD rental giant hit an all-time high last month, before plunging after an uninspiring quarterly report. With 8.2 million subscribers, Netflix is here to stay. The company has been raising its 2008 membership targets, although it hasn't been accompanied by higher income projections. Digital delivery will pose a more competitive marketplace, but Netflix isn't taking those threats lying down.

Marvel has been a lot like Iron Man's metal-donning superhero, Tony Stark. It's rich. It's popular. It has the brains to give itself more brawn. The blockbuster success of the Iron Man movie isn't the only reason why Marvel hit a new all-time high this month, but as the first of the Marvel-bankrolled productions, it definitely opens up the company's earnings power now that it has more riding on its in-house features.

Sirius has been a stinker, failing to live up to the fiscal hype after Howard Stern's arrival. It's not as if one can blame Sirius. The company's subscriber growth has been explosive in recent years. Losses have been narrowing, with the occasional period of positive cash flow. The company's planned merger with XM Satellite Radio (NASDAQ:XMSR) has been a patience-tester, given the slow-footed FCC, but the deal's likely completion should result in model-altering cost savings and operating efficiencies.

CNET Networks joins aQuantive in giving into the buyout swan song. It may not be doing too many victory laps after last week's deal to be acquired at $11.50 a share, if only because the company's growth failed to keep pace with both its potential and the growth of the online advertising market.

A virtual $99 for your thoughts
I'll be back next week with a new version of the $99 portfolio, but why don't you give it a shot today? Now that we allow readers to post comments, take a few minutes to drum up your own $99 portfolio and post it by scrolling down this page to the section marked "Comments from our Foolish Readers."

Obviously this is just a mental exercise. Commissions alone would kill a real $99 portfolio consisting of single share purchases. However, I think you'll enjoy the challenge of trying to round up as many of your favorite stock ideas as you can stuff into a $99 box.