The Motley Fool Previous Page


Why "The World's Greatest Retirement Portfolio" Continues to Outperform the Market

http://www.fool.com/investing/general/2013/05/28/why-the-worlds-greatest-retirement-portfolio-conti.aspx

Brian Stoffel
May 28, 2013

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 (NASDAQ: GOOG)

6/26/11

80.9%

47

Pricesmart

6/28/11

75.3%

43

Baidu (NASDAQ: BIDU) **

9/15/12

(12.9%)

(43)

Intuitive Surgical (NASDAQ: ISRG)

7/25/11

25.1%

(3)

National Oilwell Varco 

7/28/11

(12.8%)

(45)

Coca-Cola (NYSE: KO)

6/21/11

33.9%

1

Whole Foods (NASDAQ: WFM)

7/5/11

69.6%

41

Amazon 

7/12/11

23.9%

(7)

Apple 

6/30/11

35.5%

5

Johnson & Johnson 

8/1/11

44.6%

11

       

Total

 

36.3%

5.1

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 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.

Next on the list of big movers was Google. Though the company didn't release any earnings news in May, it did host its annual I/O Conference.  The company announced that it will have a new Google Maps iteration coming soon, it unveiled the Android and Google Play subscription music service, and it offered a look into the newest update of Chrome.

But perhaps most interesting of the five product announcements was that Google 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. As with Google, 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% --